Running discussion on SP, page-54048

Price rallies all round for the three amigos nickel, cobalt and lithium

Lithium carbonate prices are going gangbusters off the back of limited supply and stable lithium-ion battery demand in China.

Benchmark Mineral Intelligence’s mid-October lithium price assessment saw battery grade carbonate up 15.6% in two weeks and upper-range LiOH prices nearing $30/kg.

And despite the slowdown during Golden Week celebrations – and the mad queues to recharge EVs – the domestic price continues to rally and availability is tightening globally as major producers begin contract discussions for 2022.

Things are looking rosy for big producers like Albemarle who’re entering contract negotiating season as prices sit 3-4x higher than last year.

@AlbemarleCorp, #Tesla‘s most important #lithium supplier, enters contract negotiating season in a very strong position with #hydroxide & #carbonate prices pushing $30K – nearly 3-4X higher than during #BatteryDay last year.$ALB $TSLA pic.twitter.com/V88RbABH17
— Howard Klein (@lithiumionbull) October 17, 2021

Then there’s nickel – which surged past $20,000 a tonne this month after it reached a seven-year high of $20,426 last month.

The price is currently sitting around $20,210 and Trading Economics analysts attribute this price to production curbs caused by power shortages in Asia and Europe.

Earlier this month Kosovo’s major nickel producer Newco Ferronikeli shut down production due to soaring energy prices.

Added to this, inventories in LME warehouses declined to 149,412 tonnes – that’s the lowest since December 2019.

Trading Economics reckons the metal could reach US$20,519.49 a tonne by the end of this quarter and could reach US$21,942.17 within 12 months.

Demand for cobalt has also benefited from growth in the EV sector, but Fastmarkets says that second generation lithium iron phosphate (LFP) batteries have become increasingly popular in China with the market share climbing to 52% in the first eight months of 2021, up from 39% in 2020 and 33% in 2019.



Basically, this means slower demand growth for cobalt which is used in smaller amounts in LFPs.

But this could be a boon for the metal, reducing the chances of shortages with the supply chain still constrained out of Africa due to landlocked deposits like the giant Mutanda mine in the Democratic Republic of the Congo which isn’t set to restart until 2022-23.

Fastmarkets reckons the supply should be able to grow with demand.

And the price for cobalt is currently around US$56,071 per tonne, up from between US$50,093-$53,000 in the month to September.

#Cobalt continues to move higher. Below is a 10 yr #LME chart showing the price today is $56,071/tonne.

The high was over $94,000/t. Cobalt mines with higher grades should outperform in this cycle. How many companies will produce cobalt in 2022?

#Africa #USA #EU #UK #China pic.twitter.com/FLB1thI0LR

— Critical Metals plc (@CriticalMetals_) October 18, 2021

A massive 111 of the 130 ASX battery metals stocks on our list posted gains last week.

Over the past year 64 stocks have posted a gain of 100% or more.

And five of them –Sayona, Renascor Resources, Core Lithium, Province Resources and Vulcan Energy – have posted a gain of 1000% or higher, and there are several more knocking at the door.




Pilbara Minerals’ next lithium auction is locked in. Will it be another record breaker?

All eyes will be on Pilbara Minerals’ (ASXLS) third auction on the Battery Material Exchange (BMX) digital platform for 10,000t (SC5.2%) spodumene on October 26.

The second auction went off at an incredible $US2,440/t, singlehandedly sparking a historic 86.5% month-on-month increase for average spod pricing industry-wide.

You can see how the first two PLS transactions (green crosses), being so far outside the trendline, caused the average to spike strongly in July and September:




While the super high price can be partially attributed to the relatively unique and competitive form of sale (open auction), it also verified what has long been suspected – there is not enough lithium being produced to meet current demand.

Pilbara Minerals will hold its third auction on the BMX for 10,000t (SC5.2%) on October 26, according to Susan Zou, non-ferrous editor at Fastmarkets.

It’s important to note the grade of 5.2% is below the second auction’s 5.5%, and well below the industry benchmark 6%, which fetches a far higher price.

The equivalent headline price achieved for industry standard 6% product in auction two would be $US2,500/t.

Susan Zou, non-ferrous editor at Fastmarkets says bids for the upcoming coming auction “will not be as aggressive”.

“While the market consensus is that spodumene tightness will not ease significantly in the short term – despite Pilbara Minerals now producing spodumene from the restarted former Altura lithium project – the bids for the upcoming auction will not be as aggressive as last time because the ascent of lithium prices in China has slowed after the week-long national holiday compared with September, while the shipment time is months away,” Zou said.

“The latest assessment for spodumene 6% Li2O min, cif China basis was $US2,000- $US2,500/t on Thursday October 15, unchanged from two weeks ago.”