Lithium

[Jack Aubrey]

The LIT DT breakout seems to be holding. Still trading a smidgen short of the previous high of USD26.80 in July.



Prices of Lithium chemicals for October were slightly down on September (according to Benchmark Minerals Intelligence). Concerns about civil unrest in Chile is a possible driver of stock prices.

Also from Benchmark, some data on Lithium battery production forecasts:

Of the 102 lithium ion battery megafactories in the pipeline up to 2028:

China: 74
USA: 5
EU: 13
Japan: 6
Korea: 2
Thailand 1
Australia 1
India: 0

I think there are currently 3 or 4 megafactories in actual production.

 

[sptrawler]

Of the 102 lithium ion battery megafactories in the pipeline up to 2028:

China: 74
USA: 5
EU: 13
Japan: 6
Korea: 2
Thailand 1
Australia 1
India: 0

I think there are currently 3 or 4 megafactories in actual production.

People wonder what Trump is worried about with China.
Three quarters of world battery manufacturing, to be built in China, lucky we are going to build one ourselves, the World market for EV's will be at China's mercy.
Hopefully a trade agreement is sorted.

 

[Value Collector]

People wonder what Trump is worried about with China.
Three quarters of world battery manufacturing, to be built in China, lucky we are going to build one ourselves, the World market for EV's will be at China's mercy.
Hopefully a trade agreement is sorted.

three quarters of the worlds EV’s will probably be sold in China to (for a while at least).

At the end of the day, if they aren’t selling to us on competitive terms, other supply centers will spring up.

a battery is just a fuel tank, so China controlling the supply of fuel tanks isn’t as bad as the Arabs controlling the supply of the actual fuel.

with ev’s we control the fuel here in Australia, if we lost supply of new fuel tanks for 6 months it wouldn’t be a big deal like it would if we lost supply of the fuel itself.

 

[qldfrog]

three quarters of the worlds EV’s will probably be sold in China to (for a while at least).

At the end of the day, if they aren’t selling to us on competitive terms, other supply centers will spring up.

a battery is just a fuel tank, so China controlling the supply of fuel tanks isn’t as bad as the Arabs controlling the supply of the actual fuel.

with ev’s we control the fuel here in Australia, if we lost supply of new fuel tanks for 6 months it wouldn’t be a big deal like it would if we lost supply of the fuel itself.

Or using a similar analogy, better be Venezuela full of oil than the US manufacturing cars?
A serious issue, or just a factual way to show who is the next superpower

 

[Jack Aubrey]

Another dull fortnight for Lithium. Despite lots of news - a coup in Bolivia, continuing civil unrest in Chile, an uptick in demand and lots of EV announcements (including Tesla's origami truck) - Lithium prices have continued to decline (Benchmark Minerals Month-on-Month prices are below) and the LIT ETF is barely staying clear of its two-year downtrend.



Experts (such as Rodney Hooper in this video) remain bullish for 2020 (and more so for 2021) but expect "disruption" to be the main feature of the markets, particular at the producer end. I think that means strategic partnerships through the battery metals supply chain, and probably some takeovers.

For those with an interest, that supply chain looks like this:


Interestingly, Australia produces 46% of the Raw Material and currently has something like 0.00% of the rest of the industry.

 

[rederob]

Experts (such as Rodney Hooper in this video) remain bullish for 2020 (and more so for 2021) but expect "disruption" to be the main feature of the markets, particular at the producer end. I think that means strategic partnerships through the battery metals supply chain, and probably some takeovers.

It's hard to see 2020 improving markedly, although I too believe that BEVs will see lithium do well heading in to the mid 20s as demand really ramps up and most vehicle producers will have multiple BEV offerings.
I have never been tempted to get into lithium producers because its potential supply was always so mach greater than demand. That is definitely likely to change.
The reports I have been reading lately have been from here.
At a producer level, Orocobre's analysis was less than optimistic near term, and like everyone else is hoping the BEV market gives them the boost they have hoped for.
As a complete aside I got my "junior swimming certificate" at a pool which is now the site of Talison Lithium's Greenbushes project.

 

[sptrawler]

Another dull fortnight for Lithium. Despite lots of news - a coup in Bolivia, continuing civil unrest in Chile, an uptick in demand and lots of EV announcements (including Tesla's origami truck) - Lithium prices have continued to decline (Benchmark Minerals Month-on-Month prices are below) and the LIT ETF is barely staying clear of its two-year downtrend.

View attachment 98727

Experts (such as Rodney Hooper in this video) remain bullish for 2020 (and more so for 2021) but expect "disruption" to be the main feature of the markets, particular at the producer end. I think that means strategic partnerships through the battery metals supply chain, and probably some takeovers.

For those with an interest, that supply chain looks like this:

View attachment 98728
Interestingly, Australia produces 46% of the Raw Material and currently has something like 0.00% of the rest of the industry.

Another lithium producer on the ropes, from oversupply situation.

https://www.mining.com/nemaska-lithium-goes-bankrup-first-victim-of-market-glut/

 

[Jack Aubrey]

Another lithium producer on the ropes, from oversupply situation.

https://www.mining.com/nemaska-lithium-goes-bankrup-first-victim-of-market-glut/

If that demand-supply chart is accurate, predictions of a lithium revival in 2020/21 may be optimistic.

 

[peter2]

Thanks, useful info. I won't include any Li stocks in my 2020 CY selections (INR you're out).

 

[sptrawler]

If that demand-supply chart is accurate, predictions of a lithium revival in 2020/21 may be optimistic.
View attachment 99252

The problem is batteries aren't that big and last 7-8 years, and machinery these days can extract a lot of material, so with it being a new market it will take quite a while before the demand outstrips supply.
Even China's buying of BEV has slowed considerably, so lithium demand for E.V's is slow, however on the medical front it is used to treat manic depression.
So there is always hope, with climate change stressing everyone.

 

[Padowan]

The problem is batteries aren't that big and last 7-8 years, and machinery these days can extract a lot of material, so with it being a new market it will take quite a while before the demand outstrips supply.
Even China's buying of BEV has slowed considerably, so lithium demand for E.V's is slow, however on the medical front it is used to treat manic depression.
So there is always hope, with climate change stressing everyone.

There are 500 years worth of Lithium reserves defined in the world today according to the US Geological survey, and as Elon Musk said Lithium is like the salt on a salad in a Lithium ion battery, it should be called a nickel and graphite battery.
The major problem for the graphite hopefuls is that synthetic graphite is now preferred by battery manufacturers for consistency purposes.
The rapid lithium supply response from Australia through rebadging of existing tin and tantalum operations created a wave of low margin spodumene producers that have saturated the market and subsequently been hung out to dry by Chinese off takers who control all the conversion plants, whilst the lithium market dynamic is bad news for buy and hold investors there will be plenty of volatility for traders to observe in 2020.
From a commodity standpoint I’m pegging my hopes on nickel and copper resource players in 2020

 

[qldfrog]

There are 500 years worth of Lithium reserves defined in the world today according to the US Geological survey, and as Elon Musk said Lithium is like the salt on a salad in a Lithium ion battery, it should be called a nickel and graphite battery.
The major problem for the graphite hopefuls is that synthetic graphite is now preferred by battery manufacturers for consistency purposes.
The rapid lithium supply response from Australia through rebadging of existing tin and tantalum operations created a wave of low margin spodumene producers that have saturated the market and subsequently been hung out to dry by Chinese off takers who control all the conversion plants, whilst the lithium market dynamic is bad news for buy and hold investors there will be plenty of volatility for traders to observe in 2020.
From a commodity standpoint I’m pegging my hopes on nickel and copper resource players in 2020

This, magnet free motors, new battery technology, we might see trendy lithium and rare earths join the long list of black tulip style bubbles

 

[peter2]

At the beginning of 2020, lithium is hot. Having missed out in the initial rally I was waiting for a pull-back for a trade opportunity. It's not going to happen now.

Chart of US Lithium ETF. This should further boost the ASX lithium producers.

 

[Dona Ferentes]

with Tesla shares at highs, https://www.aussiestockforums.com/threads/tsla-tesla-motors-inc-nasdaq.29331/ am trying to work out if it is a chicken/ egg relationship with Lithium (.... or a Pearl Harbour moment for renewables)

However, it all seems rather suddden

a change in sentiment has seen lithium miners share prices soar in 2020 – even though we are only 9 trading days into the year. The Galaxy Resources Limited (ASX: GXY) share price is up 24%, the Orocobre Limited (ASX: ORE) share price is up 34% and the Pilbara Minerals Ltd (ASX: PLS) share price is up 19%. Could the sector be coming back to life or is just another short-term bounce for lithium?

but there are a few factors that may crimp the rise:

The lithium spot price has yet to make a positive turn despite increasingly bullish news from the electric vehicle market. Lithium carbonate and lithium hydroxide continued to falter towards the end of 2019. Asian seaborne battery-grade hydroxide prices fell by 50 cents in December to less than $10 per kg (compared to $15 per kg in December 2018), while lithium carbonate prices held steady.

European and US prices fell on competitive offers and slowing market activity. Domestic Chinese prices were unmoved with limited transitions as markets are winding down ahead of the Lunar New Year on January 25. Without improving spot prices, lithium fundamentals will not materially improve and miners will continue to be reluctant to ramp up production

 

[peter2]

Update on the lithium ETF (LIT).
Hit by the virus selloff Mar 2020 but has bounced back quite quickly. There has been a minor BO-NH at 26.00 on 18th May 2020 (circled in the chart).



Why bother looking at this chart?
Well, have a look at the charts of the main ASX Li producers (GXY, ORE, PLS).
GXY - still bumbling along sideways.
PLS - has already started to rally but has accelerated since 19th May.
ORE - Bounced strongly starting at 19th May and has continued higher.

 

[Dona Ferentes]

general market sentiment? !

The European Union has issued a plan to cut its dependence on Chinese supplies of rare earths, lithium batteries and solar cell components, as it tries to build a green energy economy that is not largely made in Beijing. Brussels will bring industry, governments and NGOs into a "European Raw Materials Alliance", which will refashion the continent's supply chains for up to 30 critical products, including those used to make wind turbines, fuel cells, solar panels, magnets, drones and batteries for electric vehicles. Lithium appears on the EU critical list for the first time...

Beside the strategic challenge lies a simple supply-demand problem: in some cases, Chinese production simply won't be enough to meet soaring European appetite as the continent implements its shift to net-zero emissions by 2050. Although lithium isn't a short-term worry, for example, "in the medium-term, large investments are needed to avoid a significant market deficit beyond 2025", the EC said. The report estimates the continent will need 18 times its current demand for battery-grade lithium by 2030, and up to 60 times as much by 2050.

That's attracted ASX-listed players such as European Metals Holdings (EMH), Vulcan Energy Resources (VUL), European Lithium (EUR) and Infinity Lithium (INF), which have mining and processing projects on foot in countries such as Austria, the Czech Republic, Germany and Spain.

The EC said it would identify mining and processing projects across the rare earths and other materials that could be up and running by 2025, and would be looking particularly closely at potential projects in what are now coal-mining regions.

Recycling raw materials from used kit will form a separate part of the strategy. Neometals (NEO) is hoping to jump on this trend, last month announcing a 50-50 joint venture with German company SMS to recycle materials from used lithium-ion batteries.
https://www.afr.com/world/europe/eu...ndence-on-chinese-commodities-20200904-p55s9h

 

[Dona Ferentes]

general market sentiment? !

Beside the strategic challenge lies a simple supply-demand problem: in some cases, Chinese production simply won't be enough to meet soaring European appetite as the continent implements its shift to net-zero emissions by 2050. Although lithium isn't a short-term worry, for example, "in the medium-term, large investments are needed to avoid a significant market deficit beyond 2025", the EC said. The report estimates the continent will need 18 times its current demand for battery-grade lithium by 2030, and up to 60 times as much by 2050.

I am finding a great disconnect between the glums and the hurray Henry's

Stuff like this, which isn't too dramatic, with Supply still exceeding demand past 2025, and a price per tonne going sideways)


and then the Joe Lowry's of the world https://www.globallithium.net/ painting a picture of shortfalls

and, tangentially, the miners of parallel commodities in the EV supply chain Ni, Mn and Co plus Graphite, mainly talking big, at least by 2025
Centaurus CTM about Nickel Sulphide for example, in today's Presentation
Talga TLG on graphite, and especially the European gigafactories (P3 of October CSIRO conference)
EU: Fastest Growing Battery Market
Germany, 2024 ... 16 GWh, later 24 GWh (northvolt VW)
Sweden, 2021 ..... 32 GWh, later 40 GWh (northvolt)
Norway, 2024 ..... 8GWh, later 32 GWh (Morrow)
Norway, 2023 .... Ramp up to 32 GWh + 2 GWh (Freyr)
Germany, 2022 ... 14 GWh, later 100 GWh (CATL)
Slovakia, 2024 .....10 GWh (inoBal)
United Kingdom, 2010 ... 2.5 GWh (envision)
Germany, 2021 ...... Ramp up to 8-12 GWh (microvasts)
United Kingdom, 2023 ... 10 GWh, later 35 (amt)
Germany, 2022 ....... 16 GWh (Farasis)
Germany, 2020 ....... 1 GWh (Leclanche)
Poland, 2018 ........... 15 GWh, later 65 GWh (LG)
Germany & France, 2022 ... 16 GWh, later 64 GWh (PSA Groupe)
Hungary, 2020 ........ 7.5 GWh, later 23.5 GWh (SK Innovation)
Germany, 2023 ....... 20 GWh, later 24 GWh (SVolt)
Hungary, 2018 ........ 3 GWh, later 15 GWh ((Samsung)
Germany, 202X ....... 4 GWh, later 8 GWh (TerraE)
Europe, 202X ........... Capacity unknown (BYO)
Germany, 202X ....... Capacity unknown (Tesla)

 

[fiftyeight]

and then the Joe Lowry's of the world https://www.globallithium.net/ painting a picture of shortfalls

Recently found this podcast, great resource.

Who knows what level Elon is working at BUT minimising the importance of Li as just the salt on the salad to using salt to transform the industry, I dunno seems like he knows there may be a bit of a supply issue here

 

[greggles]

Yesterday, Morgan Stanley forecast that lithium prices would fall by 45% by 2021 as a result of increasing global supply. Another article at oilprice.com is similarly suggesting that the current lithium price is approaching bubble territory.

Interesting to re-visit old threads and look at old predictions. Morgan Stanley were on the money, but 45% was an underestimate. The price of lithium carbonate fell from US$148,000 a tonne to US$37,000 a tonne between February 2018 and October 2020, a period of approximately two and a half years.

However, the price of lithium carbonate has since turned up and is now around US$54,000 a tonne.

Has the lithium price now bottomed and could we see a good year for lithium in 2021?

Lots of lithium stocks are looking bullish today. Is the bottom in?

 

[Cam019]

GLOBAL X LITHIUM & BATTERY TECH ETF [LIT]

This chart is a thing of beauty. LIT dropped approximately 45% during the COVID sell off then proceeded to increase by around 394% over the next 9-10 months. Then, check the ascending triangle here. Specifically, look at the volume as the pattern builds. It's decreasing as the triangle builds from left to right. Perfect. Higher lows. No real supply. Could bode well for a lithium sector play on the ASX. Look for the strongest names!