Lithium Miners News For The Month Of December 2019

Dec. 24, 2019 10:58 PM ET

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Welcome to the December 2019 edition of the lithium miner news. This past month saw lithium prices fall again. Most experts are saying the bottom is very close and that lithium prices should pick up in H2 2020.

Lithium spot and contract price news

During December, 99% lithium carbonate China spot prices were down 5.20%. Spodumene (5% min) prices were down 2.1%, and spodumene (6% min) prices were reported in December by Mineral Resources at US$520/t.

Fastmarkets (formerly Metal Bulletin) reports 99.5% lithium carbonate battery grade spot midpoint prices cif China, Japan & Korea of US$8.75/kg (US$8,750/t), and min 56.5% lithium hydroxide battery grade spot midpoint prices cif China, Japan & Korea of US$10.75/kg (10,750/t).

Lithium hydroxide, battery grade, cif China, Japan & Korea

Lithium carbonate, battery grade, cif China, Japan & Korea

Source: Fastmarkets

Lithium demand versus supply outlook

An article from October 31 from Investing News reported:

Canaccord: Lithium needs US$30 billion to meet long-term demand. To put that number into context, the lithium market last year was worth US$4 billion,” he said at a conference in Melbourne. “(To reach US$30 billion) the industry is going to need significant investment from equity markets, from industry participants, to make sure that supply is there when it is needed.”

On November 26, Investing News released a must-view video: Simon Moores: 2020 is the battery metals revolution decade. Highlights were:

• 2020 begins the battery metals and energy storage revolution decade.
• 2019 was the battery megafactory boom, as numbers grew in 2019 from 52 to 103 (capacity by 2030) megafactories. Led by China with 72 megafactories, Europe with 14, US with 5, the rest are elsewhere. "The US is far behind in the battery arms race... China is surging ahead at every point of the supply chain... Germany is fighting back... What is the US doing?"
• 2020-21 should be the EV metals recovery ready for a 2021-2022 EV and EV metals boom.
• Based on the 103 megafactories it equates to 2,028 GWh by 2030, or enough for 38 million electric cars by 2030... (my calculation makes that ~ 40% market share).
• "Once you have the mid-stream investment (battery factories) then the rest of the supply chain starts filling out." If you think there is not enough battery capacity well materials (EV metals) is worse.
• "Why is everyone in lithium depressed?... Lithium (price) is down 12%, demand is up 18%... What industries in the world have growth of 18% per year... and everyone in the industry is depressed???"... "Graphite same story... double digit growth... Nickel sulphate demand 30% up"... "Extreme double digit growth"... Price is depressed but demand is going through the roof"... that's what we call the lithium-ion supply chain double digit paradox". "Look at the fundamentals... it has to change next year. Lithium spodumene by Q2, lithium chemicals by Q4 2020... maybe Q1 2021. If lithium prices start rising they will go quickly..10,20,30,50% in a 2 month period. When lithium spikes it spikes."
• Phase 2 EV growth to start around 2021 ("it is China dependent, but Europe, and Tesla will pick up ~2021").
• "Quality and scale is what is needed... 10x or more will be needed for battery ready quality battery materials" in the next decade.
• The winning companies will be well partnered and tied into the existing industry especially for lithium and graphite (need expertise to make battery quality materials).

Lithium market and battery news

On November 25, The Financial Times reported:

Battery maker Northvolt scales up ambitions with factory push. Europe’s leading battery start-up is aiming to build almost triple the number of large factories it currently has planned, and is open to tie-ups with the continent’s leading industrial players, as it significantly scales up its ambitions. Northvolt, the Swedish group that makes batteries for electric cars, energy storage and other industrial uses, has raised more money than any other European start-up this year, pulling in €1bn from the likes of BMW, Goldman Sachs and Ikea.

On November 27, Auto News Europe reported:

Battery suppliers' feud may disrupt EV production. South Korea's SK Innovation beat its larger rival LG Chem to a multibillion dollar deal in 2018 to supply Volkswagen Group with electric vehicle batteries in the United States. Stung by missing out on the VW deal to SK Innovation and the departure of 77 employees for its rival, LGC took SKI to court in the U.S. in April accusing it of misappropriating trade secrets.

Lithium-ion battery manufacturers planned capacity increases to 2025

Source

Tim Treadgold: Lithium stocks close to the bottom, it’s time to revisit a sold-down sector. “However, all is not lost,” Macquarie said. “European EV sales are starting to push meaningfully higher on Nordic (Scandinavian) market share gains and as Tesla’s sales lift. When, rather than if, China re-stimulates EV production, battery metals miners will stage a recovery, and if that stimulus coincides with continued strength in Europe and an uptick in US demand for EVs, the battery metals business should move out of first gear. No-one is suggesting a rush back into battery metal stocks, but there is certainly a case for treating the sector as one that is approaching a bottom with the prospect of a significant recovery starting next year and perhaps running for some time.

Battery prices fall nearly 50% in 3 years, spurring more electrification: BNEF. Average market prices for battery packs have plunged from $1,100/kWh in 2010 to $156/kWh in 2019, an 87% fall in real terms, according to a report released Tuesday by Bloomberg New Energy Finance (BNEF). Prices are projected to fall to around $100/kWh by 2023, driving electrification across the global economy, according to BNEF's forecast. Customers purchasing batteries at a commercial scale for electric vehicles and energy storage, as well as using high energy density cathodes to store energy more efficiently in battery packs, are all spurring the price decline.