A very positive analysis from SeekingAlpha overnight:
https://seekingalpha.com/article/4226424-ev-metal-miners-rout-end-soon
I've inserted the Summary and Conclusions sections below, but the whole article is well put together and worth a read - especially for those amongst us that are all 'doom and gloom'! You know who you are.
Summary
The EV metals miners have been smashed down in 2018 and are now very oversold. 2018 lithium and cobalt prices remain firm suggesting oversupply fears are largely unfounded.
EV sales and energy storage are booming - these are very strong tailwinds to the EV metal miners.
EV metals demand is strong and generally, supply is struggling to keep up. Cobalt has pulled back due to a strong but expected short-term DRC supply response.
The EV metal miners rout has been overdone and sentiment will soon change to match the strong underlying fundamentals.
Conclusion
A series of poor market sentiment events (oversupply fears, trade war, US equities fall in October) in 2018 has led to a very large EV metal miners sector sell off over the year. Yes, valuations of some stocks were a bit frothy back in January after a great H2 2017. By comparison, valuations and prices are now very cheap, especially given the demand growth ahead for the sector.
What many are missing is the enormity of the demand surge for EV metals that is just beginning now. As Sam Jaffe says "the global market for lithium-ion batteries will double by 2020", and Simon Moores "50 megafactories are coming." This will be one of the largest demand pull events in the history of metals, especially for cobalt and lithium given their small market size. Beyond 2020 demand may even accelerate as EVs become cheaper and more accepted. And if Bloomberg's forecasts are anywhere near correct we can expect a 54 fold increase in the number of EVs between 2017 and 2040. Often forgotten is also the electrification across the entire transport sector (bikes, trucks, buses, trains, ships, etc), and the rise of energy storage using lithium-ion batteries.
Risks remain due to very poor sentiment and the outcome and length of the US-China trade war. Risk also lies around the assumption and speed of EVs and ES taking off, as well as funding risks for junior miners.
Reward is very high given the potential strong demand tailwinds, and should we get a US-China trade deal then a very significant recovery is to be expected.
Investors should ride the current storm and sit tight to reap the rewards that will come as these powerful trends play out over the next two decades.
(20min delay)