Battery metal supply issues are materialising big time for car manufacturers - ."They were too far removed [from supply]. "Today they've been caught short and they're going to have to pay through the nose"...........RF prediction of them coming to us is real.

MinigNews.net

Car makers 'asleep at the wheel' on battery raw materials: Brinsden

PILBARA Minerals boss Ken Brinsden says the phenomenal demand for lithium has created a major issue for end users

Speaking at a Resources Rising Stars investor luncheon in Perth yesterday, Brinsden said spodumene's rise over the past 15 months was the equivalent of the gold price jumping from $1500 an ounce to $6000-7000/oz. "It's in response to incredible demand conditions," he said. "Demand has gone through the roof to the extent that it is a really, really big issue for the industry."End users are just about hitting the panic button. "Brinsden said end users had not focused on where the lithium and other battery raw materials were going to come from. "Car makers were asleep at the wheel," he said."They were too far removed [from supply]."Today they've been caught short and they're going to have to pay through the nose."Brinsden doesn't believe the price rises will lead to demand falling away, "at least not right away".He noted manufacturers of internal combustion engines were also experiencing cost inflation and it was a year wait for many cars currently.

Pilbara guided for March quarter spodumene prices of $2600-3000 per tonne."However, today's actual price is $4500-5000/t, indicating the trend in spodumene prices," Brinsden said.Pibara wowed the market last year when it received prices above spot for auctions via its BMX platform, "the eBay of spodumene"."The next auction shouldn't be too far away," Brinsden said.Today, Allkem reported that it expected to receive $5000/t of spodumene in the June quarter and $35,000/t of carbonate in the June quarter, significantly above March quarter pricing.Chinese chemical prices have surged to more than $80,000/t."Our leverage to Chinese pricing is pretty much unsurpassed in the Western world," Brinsden said.According to Brinsden, lithium majors Albemarle and SQM were not as exposed to China and were receiving lower prices due to legacy contracts.Last week, Fastmarkets reported that Chinese lithium carbonate prices had dropped by 5000 yuan per tonne to 495,000-510,000 yuan ($77,656-80,010/t)."I think that's probably the market taking a bit of a breather," Brinsden said."It doesn't materially change spodumene. Raw materials producers are going to keep winning margin."Pilbara is making further efforts to capture margin by heading further downstream.A scoping study into the production of lithium phosphate salts, released yesterday, confirmed the viability of producing an additional value-added product at Pilgangoora.The study was completed by Lycopodium using Calix's flash calcination technology.Capital costs for a full demonstration plant to produce 3000t of lithium phosphate salts with 98% purity from 27,000t of spodumene are estimated at A$50-70 million.Brinsden said global production of lithium phosphate salts was currently small and mostly came from battery recycling."It's the next evolution of spodumene and Pilbara Minerals is determined to be a part of it," he said.Pilbara shares were up 5.3% to $3.37, the highest since January. At that price, the company has a market capitalisation of $10 billion.