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St0ckhead perspective today  on the changing tides of lithium ....

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High Voltage: Lithium market recovery starts to gain traction
Mining
10 hours ago | Mike Cooper

• Lithium market appears poised for a turnaround after a two-year bear market
• ‘The global EV industry is expected to shift from being policy-driven to demand-driven between 2020 and 2025’
• UK government moves forward ban on petrol and diesel vehicles to 2030

It’s well-known in Australia’s mining fraternity that lithium prices have been stuck in a bear market for the past two years.

There are encouraging signs that the market is on the turn, however, as the fanfare around electric vehicles (EVs) grows louder.

Fund managers are cottoning on to the lithium market’s price recovery and are starting to manoeuvre into ASX lithium stocks.


James Stewart, resources portfolio manager at Ausbil Investment Management, is one market expert sensing a change in fortune.
“Anecdotally, lithium producers are suggesting pricing has increased slightly in recent weeks and months, and demand from customers has stabilised and is increasing,” Stewart says.

Another sign of a market turnaround is some industry consolidation in the ASX lithium sector, which could streamline capacity.
Pilbara Minerals (ASX PLS) is in talks with lenders to Altura Mining (ASX:AJM) to acquire its WA lithium mine for $247m.
“The potential acquisition represents a logical consolidation of two neighbouring operations to unite the greater Pilgangoora orebody, unlocking tangible synergies in both the short and long term,” said Pilbara Minerals managing director, Ken Brinsden,


Prices for lithium halved in two years

Lithium prices are trading at $US9 per kilogram, and half the levels of only two years ago when prices were at $US20/kg, according to the London Metal Exchange.

At the LME’s virtual global gathering in October, (LME Week), attendees were upbeat about lithium’s prospects.
New models of EVs are appearing in the market, providing more consumer choice, and sales are gathering momentum.

Some pundits took this as a welcome sign that investor interest is starting to increase in lithium miners and explorers.

Added to this, the UK government shocked oil markets this week with its proposal to outlaw sales of petrol and diesel cars from 2030.
Prime minister Boris Johnson brought forward the ban date from 2040 to 2035, and now to the end of the decade.
The move is aimed at boosting sales of EVs to achieve the UK’s goal of net zero carbon emissions from its economy by 2050.

China market demand forecast to grow above expectations

At a lithium industry gathering in China this week, sentiment toward the sector was described as “positive”.
China’s consumption of lithium refined products was reported to have grown at an average rate of 24 per cent since 2015.

As a result, the market is forecast to reach 810,000 tonnes LCE by 2025, including 640,000 tonnes in China’s EV industry.

This level of demand is based on EV sales of 16 million units by 2025, and rising to 35 million units by 2030.

“The global EV industry is expected to shift from being policy-driven to demand-driven between 2020 and 2025, with this trend expected to accelerate once EVs maintain an up-front cost advantage over traditional internal combustion engines,” said research firm Roskill which attended the lithium event in China.