Lithium Related Media Articles, page-19646

FINANCIAL REVIEW LITHIUM
Time to sift through lithium wreckageProfessional investors say demand is likely to soar due to big increases in how much is used in electric vehicles.Mark DraperContributorDec 12, 2023 – 5.00amSaveShareListen to this article3 minInvestors have seen the price of lithium fall by around 80 per cent this calendar year on the back of increasing supply, inventory drawdowns at cathode companies and subdued demand for electric vehicles (EVs).But there are reasons for optimism in the lithium sector as demand could materially exceed supply as soon as 2025.The Pilbara Minerals lithium mine in Western Australia. New York TimesSteven Glass, portfolio manager from Pella Funds Management, highlights that the primary markets for lithium are EV batteries, other batteries, ceramics and glass. EV batteries are the fastest growing segment by a considerable margin and is the key driver of the lithium market.There are two types of passenger car EVs – battery EVs (BEV) and plug-in hybrid (PHEV). The former are powered entirely by a lithium battery and don’t use petrol. The latter are powered by petrol and a lithium battery that is recharged via an electric socket.Investors may be surprised that China is the largest consumer of EVs, followed by Europe and then the US.RELATED QUOTESPLSPilbara Minerals$3.490 -0.29%1 year1 dayDec 22Mar 23Jun 23Dec 233.0004.2005.400Updated: Dec 14, 2023 – 10.18am. Data is 20 mins delayed.View PLS related articles AdvertisementGlass says most people understand that EV sales are likely to grow considerably but don’t appreciate how much the average amount of lithium per EV is likely to increase. This is the key reason lithium demand is likely to exceed current expectations.Glass explains there are two primary types of lithium batteries: NMC, made using nickel, manganese and cobalt; and LFP, using iron and phosphate. NMC batteries offer superior performance and dominate the EV battery market outside of China. LFP batteries are considerably cheaper than NMC, and the performance differential between them has narrowed. LFP batteries are popular in China and are starting to take market share in other countries. Glass calculates that LFP batteries need 15 per cent more lithium than NMC batteries.Shift to larger electric vehiclesChinese mini-EVs use less than 5kg of lithium, says Glass, whereas large US pickup trucks and luxury vehicles use more than 15kg of lithium per vehicle.The critical trend Glass anticipates is a change away from Chinese mini EVs to larger BEVs, particularly in the US. His analysis suggests lithium demand will grow at 24 per cent a year to 1540 kilo tonnes by 2025. The Australian government’s most recent 2025 production forecast is 1511kt.The big risk to this forecast is slower uptake of larger BEVs in the US.AdvertisementAustralia has some of the world’s largest lithium deposits and several leading lithium miners are listed on the ASX.

Gina Rinehart’s spending spree on lithium stocks Liontown Resources and Azure Minerals is an example of how investors should always keep an eye on what the smart money is up to.

Nathan Bell, head of research at Intelligent Investor, suggests investors should concentrate on the best lithium miners and producers that can withstand low prices for extended periods until demand eventually overwhelms short-term oversupply. Pilbara Minerals, with a large cash balance that allows it to keep investing while the lithium price is low, is attractive.Bell also likes Mineral Resources where lithium is only one of four main businesses. The company has clear plans to expand production across its whole business, and Bell says the lithium business could ultimately be worth 50-100 per cent of the current share price.