Welcome to the November 2022 edition of the lithium miner news. The past month saw lithium prices hit new record highs again and further reports of lithium prices expected to stay stronger for longer supported by deficits. We did also see a minor lithium price pullback based on a Chinese 'rumor' (see market news below). We also saw some stellar Q3 earnings results from the majors with Albemarle up 7x and SQM YTD up 10.5x (see company news for details).
Asian Metal reported during the past 30 days, the 99.5% China lithium carbonate spot price was up 1.6% and the China lithium hydroxide price was up 1.56%. The Lithium Iron Phosphate (Li 3.9% min) price was minus 0.08%. The Spodumene (6% min) price was up 0.98% over the past 30 days. Tantalum Rod
Benchmark Mineral Intelligence reported China lithium prices of (battery grade carbonate - RMB 568,500 ($80,150), hydroxide RMB 564,000 ($79,525), and Benchmark stated (paywalled): "Contacts reported to Benchmark that rumours were circulating the market regarding cell manufacturers limiting their production in November, weighing on lithium demand sentiment, however these speculations are yet to be confirmed, with some players confirming publicly that operations were running as normal......overall demand in 2023 is expected to continue to rise, meaning any softening is likely to be transitory."
Metal.com reported lithium spodumene concentrate (6%, CIF China) price of CNY 39,058 (~USD 5,470/mt), as of November 22, 2022.
In mid-November Pilbara Minerals reported the results of their latest 5,000t spodumene BMX auction stating: "....the highest bid of US$7,805/dmt (SC5.5, FOB Port Hedland basis) which on a pro rata basis for lithia content and inclusive of freight costs equates to a price of ~US$8,575/dmt (SC6.0, CIF China basis)."
China Lithium carbonate spot price 5 year chart - CNY 591,500 (~USD 82,838)
Wood Mackenzie's lithium price forecast - July 2022 (Source)
Mineral Resources presentation courtesy Wood Mackenzie
Mineral Resources presentation courtesy Wood Mackenzie
2021 IEA forecast growth in demand for selected minerals from clean energy technologies by scenario, 2040 relative to 2020 - Increases Of Lithium 13x to 42x, Graphite 8x to 25x, Cobalt 6x to 21x, Nickel 7x to 19x, Manganese 3x to 8x, Rare Earths 3x to 7x, And Copper 2x to 3x
Rio Tinto forecasts lithium emerging supply gap (October 2021) - 60 new mines the size of Jadar will be needed
Lithium demand v supply forecast by Benchmark Mineral Intelligence (mid 2022 forecast)
BMI (Q2, 2022 forecast) - Lithium demand to exceed supply mostly this decade
2022 - UBS lithium demand v supply forecast to 2030
BMI demand growth 2022-2035 (in mtpa) for critical metals, also number of new mines required by 2035
Benchmark Mineral Intelligence (LinkedIn) UBS
BloombergNEF lithium demand v supply forecast (as of mid 2022)
BMI - Global lithium-ion battery gigafactory pipeline - now at 304 and 6,387.6 GWh as of May 2022
Volkswagen: we have never had supply chain shortages like today......"We never used to talk to mining operators - now we know their business model"......
Deglobalization of lithium-ion supply chain key for transition to new generation energy for Western economies. "Get used to deglobalization," Wood McKenzie's vice-chairman metals & mining, Julian Kettle, said at the LME Metals Seminar on Monday October 24, "[because that] is how we will deliver the energy transition - rather than globalization."..... Delegates heard how Western economies have been increasingly moving to deglobalize the lithium-ion battery supply chain to reduce their over-reliance on certain countries - namely China. And they were told that supplies of lithium, alongside other key battery materials such as cobalt and nickel, have been tight in recent years and struggling to keep up with the surge in demand as the world pushes for electrification......In the meantime, tight global supplies have seen lithium prices reached record highs.
On October 25 Caixin Global reported:
CATL aims to mass produce sodium-ion batteries in 2023......it has been setting up a supply chain for the batteries and has entered negotiations with some carmakers about their use. The context: The technological limitations of sodium-ion batteries have mostly seen their use confined to things like e-bikes and energy storage, according to analysts at brokerage Pacific Securities Co. Ltd.......CATL's first-generation sodium battery generates 160 watt-hours electricity per kilogram, compared to over 200 watt-hours for a mainstream lithium battery.
On October 25 Mining Technology reported:
Imerys to develop new lithium exploitation project in France. The project, which would cost about €1bn for construction, is expected to produce 34,000 tonnes of lithium hydroxide annually. French minerals company Imerys is set to develop a new lithium exploitation project, named the Emili Project, at its Beauvoir site in Allier, France.....French minerals company Imerys is set to develop a new lithium exploitation project, named the Emili Project, at its Beauvoir site in Allier, France......Based on initial assessments, the project is expected to produce 34,000tpa of lithium hydroxide for at least 25 years.
Oversupply of LFP battery cathode materials may loom on rapid capacity expansion in China.....The supply of cathode materials is about to exceed the demand, but this does not necessarily mean that the shortage of lithium mineral refining has been resolved, industry sources said, stressing that the refining crunch will not ease until 2025 and many new makers of cathode materials may lack upstream lithium materials to support their production as a result.
Eye on Lithium: It'll be tight, but global battery metals supply WILL be able to meet surging EV demand, Fastmarkets. Although demand for EVs is expected to grow significantly through to 2032, Fastmarkets says BRM supply will be able to support that demand. "It is going to be tight and supply-demand balances will go slightly negative in the second half of decade but overall, the combination of investment, expanded production, new projects, evolving technology, and an emerging recycling market is forecast to support EVs and other battery demand through 2032," the agency says.
Fastmarkets lithium demand v supply forecast (as of 2022) (Source)
Panasonic to start building Kansas battery plant next month.....and aims to begin mass production by March 2025, targeting North America's fast-growing market for electric vehicles. The conglomerate's energy unit said in July it had picked Kansas as the site for a new plant to supply batteries primarily to Tesla Inc........
EV battery production faces supply chain, geopolitical headwinds - report.......original equipment manufacturers' battery-electric and hybrid vehicle sales aspirations will face strong headwinds as they scramble for raw materials, with annual market demand for lithium-ion batteries pegged at about 3.4 Terawatt hours (TWh) by 2030......."Elements such as lithium, nickel, and cobalt do not just magically appear and transform into EV batteries and other components,"......The intermediate steps between excavation of elements and final assembly are a particular choke point, he added......
On November 1, The Business Times reported:
South Korea launches government-backed battery alliance to source key metals......The country, home to major battery makers LG Energy Solution, Samsung SDI, and SK Innovation's SK On, is seeking to bolster supply chain stability and metals to become a major player in the field, which is dominated by China.......
On November 5, Global X ETFs posted on Seeking Alpha:
Lithium market update: Elevated prices are creating favorable dynamics for miners......Supply is unlikely to grow in lockstep with demand through the first half of the decade, likely generating deficits that could support elevated lithium pricing.
On November 8, The European Union announced:
COP27: European Union concludes a strategic partnership with Kazakhstan on raw materials, batteries and renewable hydrogen.......The EU and Kazakhstan have committed to develop a Roadmap for 2023-2024, with concrete joint actions agreed within six months of the signature of the Partnership......The Commission has already adopted two strategic partnerships on raw materials with Canada (June 2021) and Ukraine (July 2021).
Democrats supercharged EV investment while they had the chance...... More than $13 billion of investment in battery raw material production and battery and EV manufacturing has been announced in the less than three months since Biden signed the IRA into law on Aug. 16. Volkswagen and Mercedes-Benz almost immediately sealed agreements to secure mining and refining resources from America's neighbor to the north. Honda and Toyota earmarked almost $7 billion worth of EV battery plant investments within two days of one another. An Australian development company started up the first US cobalt mine in three decades. BMW said it would spend $1.7 billion expanding its South Carolina SUV factory, and that its battery supplier would build a new plant nearby.
Democrats supercharged EV investment. Battery manufacturing being the main winner so far (Source: Bloomberg)
On November 10, S&P Global reported:
FEATURE: Raw material supply a challenge to meet battery demand. Lithium could present greatest challenge.....As the Western world looks looking to increase battery making capacity, one challenge facing the industry is raw material supply and whether there will be enough to meet demand by 2030…Battery maker Northvolt does not believe there will be enough raw material supply and refineries to supply the planned gigafactory capacities planned by 2030…The Cobalt Institute believes there will be enough cobalt to meet demand by 2030, although it will require investment, continued diversification and recycling, its president Adam McCarthy said......."
On November 10, Korea JoongAng Daily reported:
Posco Chemical finishes largest cathode plant in world. Posco Chemical finished construction of the world's largest cathode plant in Gwangyang, South Jeolla, to become a major player in the fast-growing electric vehicle (EV) battery industry. The 165,203-square-meter plant has 90,000 tons of annual capacity, which is enough to make batteries for 1 million EVs. That is the world's largest facility in terms of cathode production, Posco Chemical said. Made of lithium, nickel, cobalt and manganese, cathode materials account for 40 percent of the production cost of an EV battery.
On November 11, Simon Moores from BMI tweeted a quote from Goldman Sachs:
"Now, adjusting our global lithium demand assumptions for this stronger restocking environment…the lithium market is expected to be in an 84kt deficit in 2022 (vs 8kt surplus previously) and a small surplus in 2023 (vs 76kt surplus previously)" Goldman. Sachs
On November 11, Bloomberg BNN reported:
Ford, GM in talks with Posco on investing in battery metal hubs. Ford Motor Co., General Motors Co., and Stellantis NV are in talks with South Korea's Posco Chemical Co. about potentially investing in plants producing electric-vehicle battery materials in North America, according to people familiar with the matter. The factories would make cathode-active or anode materials......
On November 13, CBS News reported:
U.S. military weighs funding mining projects in Canada amid rivalry with China. Canadian companies told they qualify under Defense Production Act......The United States military has been quietly soliciting applications for Canadian mining projects that want American public funding through a major national security initiative.
On November 15, Seeking Alpha reported:
Lithium stocks slammed on talk of Chinese cutbacks, negative analyst notes.....following a selloff in Asian lithium producing peers on rumors of production cutbacks at a major Chinese producer of cathodes...... Goldman Sachs reaffirmed its bearish views on lithium this week, forecasting supply will begin to outpace demand from 2023 onwards.
Note: On November 14 Fintel reported: "Goldman Sachs Group Inc reports 48.11% increase in ownership of LAC / Lithium Americas Corp."
Tesla to negotiate battery-grade lithium refinery in TX behind closed doors. Tesla's negotiations for a battery-grade lithium refinery in Texas are going to be handled behind closed doors. Tesla will be discussing the details of its planned $365 million lithium refinery with Nueces County commissioners. On Wednesday, November 16, Nueces County commissioners unanimously voted to move negotiations with Tesla to executive session.
On November 16, Benchmark Mineral Intelligence reported:
How can the world meet Elon Musk's 300 TWh battery capacity target? The world will need to increase battery production thirty-fold from today's levels......Production of lithium ion batteries will need to increase from 0.6 TWh a year to 20 TWh by 2050.......That would require a twenty-fold increase in lithium supply to 12 million tonnes of lithium LCE and a similar increase in nickel sulphate to 8 million tonnes. Cobalt supply would have to increase by five times to 1 million tonnes of cobalt sulphate, and manganese by over twenty-fold to 2.5 million tonnes of manganese sulphate, according to Moores.
Note: Bold emphasis by the author.
On November 17, The West Australian reported:
Expert predicts meteoric price rise for lithium. Internationally recognised lithium expert Joe Lowry expects the price of battery quality lithium carbonate to continue its upward trajectory into 2027 before hitting highs of US$97,000 per tonne as the supply and demand curve starts to invert.......Whilst the US$97,000 tag is the peak price predicted by Lowry, the Global Lithium LLC founder has identified a base value of just below $US80,000 and a potential 2027 low of around $US70,000......Lowry predicts the current global lithium supply deficit to continue for some years and whilst there has been significant growth in potential supply with numerous projects being unlocked all over the world, demand is still growing faster.
Monsters of Rock: Chris Ellison goes HAM on lithium bears at MinRes AGM...... Speaking at the lithium and iron ore miner's AGM in Perth today, two days after analyst notes from Credit Suisse and JPMorgan on a drop in carbonate futures in China sent investors in lithium running, Ellison bullishly said there is "way more demand than supply"...
On November 17, Market Index reported:
Lithium market to remain in deficit despite supply efforts and price volatility: Macquarie. Macquarie expects the lithium market to remain in deficit through to 2030.....
On November 18, Reuters reported: "U.S. Republicans aim to shorten EV mine permitting after House win."
On November 20, Joe Lowry tweeted: "Finally a "Morgan" that gets the #lithium market situation. @jpmorgan seems to be listening to the @globallithium podcast."
On November 21, BNN Bloomberg reported:
Canada's battery supply credibility jumps as multi-billion announcements keep coming...... Research firm BloombergNEF pushed Canada's position in its annual global ranking of battery-producing countries ahead of everyone else but China.......Canada has announced more than $15 billion in investments over the past 10 months in areas ranging from critical mineral mining and processing to battery component manufacturing, electric vehicle production and the country's first gigafactory.
On November 21 The Tennessean reported:
South Korean firm to spend $3.2B in TN, create 1,000 jobs in what governor calls historic investment......Tennessee and LG Chem announced plans to develop a cathode materials plant for electric vehicle batteries, which Lee said will bring around 1,000 jobs to the area with a $3.2 billion investment.......LG Chem CEO Hak Cheol Shin said construction on the plant is set to begin in the first quarter of 2023, with mass production scheduled to start in late 2025. Shin said the factory is projected to produce 120,000 tons of cathode battery materials annually once fully operational, which is enough to power batteries in 1.2 million electric vehicles.
Note: Piedmont Lithium recently announced their plans to build a lithium hydroxide facility in Tennessee with production to start in 2025.
On November 2, Albemarle announced: "Albemarle reports net sales increase of 152% for third quarter 2022." Highlights include:
On November 2 Seeking Alpha reported:
Albemarle Non-GAAP EPS of $7.50 beats by $0.51.....Revenue of $2.09B (+151.6% Y/Y) misses by $120M. The company tightened FY2022 guidance:.....Adjusted EPS of $19.75 - $21.75 from previous outlook of $19.25 - $22.25.....We had an outstanding quarter driven by strong demand for lithium-ion batteries," said Albemarle CEO Kent Masters......With our acquisition of the Qinzhou lithium conversion plant in China and mechanical completion of our Kemerton II expansion in Australia, we are on track to more than double our lithium conversion capacity compared to last year.
Albemarle profit hits record high as EV boom powers lithium demand. Earnings were more than seven times the same year-ago period. World's top miner sees 'ongoing strength in lithium pricing'.
On November 9, Albemarle announced: "Albemarle Corporation invests up to $540 million in Arkansas facility expansion....."
Chilean Chemical and Mining Society SA (NYSE:SQM), Wesfarmers [ASX:WES] (OTCPK:WFAFY), Covalent Lithium (SQM/WES JV)
On November 16, SQM announced: "SQM reports earnings for the third Quarter of 2022." Highlights include:
Chemical and Mining Society SA
Chemical and Mining Society SA
On November 9 The Korea Post reported:
SK On signs lithium hydroxide supply deal with SQM of Chile. To secure high quality lithium hydroxide for five years starting in 2023......In addition to the supply deal, SK On and SQM agreed to discuss a mid-to long-term partnership to enhance their cooperative relationship, including additional lithium supply, potential investment in production plants, and waste battery recycling.
Q4, 2023 - Mt Holland spodumene production to begin (SQM/Wesfarmers JV).
Q4, 2024 - 50ktpa Lithium hydroxide [LiOH] refinery (SQM/Wesfarmers JV).
Investors can read SQM's latest presentation here or the latest Trend Investing article on SQM here.
Jiangxi Ganfeng Lithium [SHE:002460] [HK:1772] (OTCPK:GNENF) (OTCPK:GNENY)
No lithium news for the month.
Investors can read the latest Trend Investing article on Ganfeng Lithium here.
(Chengdu) Tianqi Lithium Industries Inc. [SHE:002466], Tianqi Lithium Energy Australia (TLEA) is a JV with Tianqi Lithium (51%) and IGO Limited (49%). TLEA owns the Kwinana lithium hydroxide facility in WA
No significant news for the month.
You can watch a good Tainqi lithium CEO video interview here, where he discusses lithium market demand and supply issues.
Kwinana Lithium Refinery JV (51% Tianqi: 49% IGO) in Western Australia
Pilbara Minerals [ASX:PLS] (OTC:PILBF)
On October 25, Pilbara Minerals announced: "September 2022 quarterly activities report. Increased production and sales generate a significant $783.7M contribution towards a cash balance of $1.375 billion, as works commence on the P680 Project." Highlights include:
On November 11, Pilbara Minerals announced:
$250m Australian Government financing to support expansion at Pilgangoora......Funding earmarked to support construction of P680 Project expansion at the Pilgangoora Operation.......The Facility is subject to final negotiation of Facility terms.....
On November 16, Pilbara Minerals announced:
Results of BMX auction. Equivalent price of ~ US$8,575/DMT (SC6.0, CIF China)......A cargo of 5,000dmt at a target grade of ~5.5% lithia was presented for sale on the digital platform, with delivery expected from mid December 2022.....
On November 16, Market Index reported:
Pilbara Minerals to hit dividend status in FY23: What does the payout look like?.....The company is targeting a payout ratio between 20-30% of free cash flow. Based on Macquarie's FY23 earnings estimates, the dividend could sit between 19.7 cents to 30 cents per share.
Late 2023 - Plan to commission production of POSCO/Pilbara Minerals (18%, option to increase to 30%) JV LiOH facility in Korea.
Mineral Resources [ASX:MIN] (OTCPK:MALRF)
Mt Marion Mine (50% MIN: 50% Ganfeng). Wodgina Lithium Mine (60% ALB: 40% MIN) restarted in mid 2022. (Note the non-binding agreement will (if completes) move Wodgina to a 50% ALB: 50% MIN JV). The 50ktpa Kemerton Lithium Hydroxide refinery (60% ALB: 40% MIN) is due for first sales in H2, 2022.
On October 26, Mineral Resources announced: "Quarterly exploration and mining activities report July to September 2022 (Q1 fy23)." Highlights include:
On November 18 Market Index reported:
A lithium spin-off is off the cards: Mineral Resources. The prospect of a lithium demerger was shot down by MinRes Managing Director Chris Ellison on Wednesday. Ellison wants to keep all four business divisions together.
Investors can read the latest Trend Investing article on Mineral Resources here.
Livent Corp. (LTHM)[GR:8LV]
On November 1, Livent Corp. announced:
Livent releases third quarter 2022 results. Revenue was $231.6 million, up 6% and 124% from the second quarter of 2022 and the prior year, respectively. Reported GAAP net income was $77.6 million, 29% higher than the previous quarter, and 37 cents per diluted share. Adjusted EBITDA was $110.8 million, 17% above the previous quarter and over seven times higher than the prior year, and adjusted earnings per diluted share were 41 cents....."Lithium demand has remained robust despite some near-term supply chain disruptions and global macro concerns," said Paul Graves, president and chief executive officer of Livent. "Published lithium prices moved higher in the third quarter amid continued favorable market conditions. Livent achieved higher realized prices and delivered increased volumes to customers."
Livent looks to Canada for lithium growth opportunities - CEO. Lithium producer Livent Corp is eyeing acquisitions in Canada and other countries as it looks to boost its production and processing of the metal used to make electric vehicle batteries, its chief executive told Reuters......."We see Canada as a core part of our expansion capacity," Paul Graves, Livent's CEO, said in a Thursday interview. "We have to get bigger. We can't just sit still."
On November 14, Livent Corp. announced:
Livent completes North Carolina expansion of largest lithium hydroxide production site in the United States.....The expansion in Bessemer City will boost the site's lithium hydroxide manufacturing capacity by 50%, helping meet the growing demand for EV battery materials produced in the United States.....
You can read the Trend Investing Livent article here when Livent was trading at US$7.26.
Allkem [ASX:AKE] [TSX:AKE] (OTCPK:OROCF) (formerly Orocobre)
On November 14, Allkem announced: "Sustainability report 2022."
First lithium hydroxide successfully produced at Naraha. Allkem Limited (ASX|TSX: AKE, "Allkem" or the "Company") and Toyota Tsusho Corporation ("TTC") are pleased to advise that the Naraha Lithium Hydroxide plant in Japan has produced its first lithium hydroxide chemical product. Allkem has a 75% economic interest in Naraha through a joint venture with Toyota Tsusho Corporation who manage the Narahan operation.
You can read the latest investor presentation here. You can read the latest Trend Investing Allkem article here.
AMG Advanced Metallurgical Group NV [NA:AMG] [GR:ADG] (OTCPK:AMVMF)
On November 2, AMG Advanced Metallurgical Group NV announced: "Lithium performance drives AMG to all-time record earnings and increased full year guidance." Highlights include:
On November 21, AMG Advanced Metallurgical Group NV announced:
AMG update on energy transformation: LIVA Batteries. AMG Advanced Metallurgical Group N.V. ("AMG", EURONEXT AMSTERDAM: "AMG") announces that its subsidiary, AMG LIVA, has put its first battery Hybrid Energy Storage System ("HESS") into fully automatic operation mode in Hauzenberg, Germany. The HESS battery system is an ecosystem combining Lithium-Ion and Vanadium Redox Flow batteries with artificial intelligence routines and self-learning algorithms to maximize efficiency, safety and lifetime of the batteries, integrating the HESS with the facility's power system, renewable energy sources, and the electrical grid.
You can view the latest company presentation here or the recent Trend Investing article here.
Lithium Americas [TSX:LAC] (LAC)
On October 27, Lithium Americas announced: "Lithium Americas reports third quarter 2022 results." Highlights include:
On November 3, Lithium Americas announced: "Lithium Americas announces intention to separate into two leading lithium companies." Highlights include:
The Separation will establish two separate companies that include:
NB: Ganfeng Lithium (51%) and Lithium Americas (49%) own the JV company Minera Exar S.A., which owns 91.5% interest and is entitled to 100% of the production from the Cauchari-Olaroz Project. The 8.5% interest is owned by Jujuy Energia y Mineria Sociedad del Estado ("JEMSE") (a company owned by the Government of Jujuy province).
Argosy Minerals [ASX:AGY][GR:AM1] (OTCPK:ARYMF)
Argosy has an interest in the Rincon Lithium Project in Argentina, targeting a fast-track development strategy. Argosy is now producing at a small scale and ramping to 2,000tpa lithium carbonate starting June 2022.
On November 1, Argosy Minerals announced: "Rincon 2,000tpa Li2CO3 operational update." Highlights include:
Investors can view the company's latest investor presentation here, and the latest Trend Investing Argosy Minerals article here.
Core Lithium Ltd. [ASX:CXO] [GR:7CX] (OTCPK:CXOXF)
Core 100% own the Finniss Lithium Project (Grants Resource) in Northern Territory Australia. Significantly they already have an off-take partner with China's Yahua (large market cap, large lithium producer), who has signed a supply deal with Tesla (TSLA). The Company states they have a "high potential for additional resources from 500km2 covering 100s of pegmatites." Fully funded and starting mining with a planned Q4 2022 production start.
On October 27, Core Lithium Ltd. announced:
Offtake update. Australian lithium miner, Core Lithium (Core or Company) (ASX: CXO), provides the following update on a definitive product purchase agreement with Tesla under the binding term sheet (announced 29 August 2022). The date for concluding the term sheet passed on 26 October 2022 without the agreement being completed.....The sale of 15,000 tonnes of direct shipping ore (DSO) shows strong international demand for Finniss lithium......Demand for spodumene DSO material was strong, evidenced by the price achieved. The DSO is expected to be shipped before the end of the year, in advance of spodumene concentrate production in H1 2023. Agreements in place with Ganfeng, and Yahua bring total concentrate sales under offtake contracts to about 80% of the Finniss Lithium Project production over the first four years of operations.
On October 31, Core Lithium Ltd. announced: "Quarterly activities report for the three months ended 30 September 2022." Highlights include:
On November 11, Core Lithium Ltd. announced: "Business update." Highlights include:
Investors can read a company presentation here, or the Trend Investing article when Core Lithium was back at A$0.055 here.
Sigma Lithium Resources [TSXV:SGML] (SGMLF) (SGML)
Sigma is developing a world class lithium hard rock deposit with exceptional mineralogy at its Grota do Cirilo Project in Brazil.
On November 18, Sigma Lithium Resources announced: "Sigma lithium announces significant progress on construction, completing 94% of concrete and 76% of steel for greentech plant, commissioning to be initiating December 2022." Highlights include:
Investors can read the latest company presentation here or the Trend Investing article here back when Sigma was trading at C$5.00.
Sigma Lithium has very large production plans (source)
The LIT fund was slightly down in November. The current PE is 23.12.
Our model forecast is for lithium demand to increase 5.3x between end 2020 and end 2025 to ~1.8m tpa, and 13x this decade to reach ~4.5 m tpa by end 2029 (assumes electric car market share of 32% by end 2025 and 70% by end 2029).
Note: A Nov. 2020 UBS forecast is for "lithium demand to lift 11-fold from ~400kt in 2021 through to 2030."
Global X Lithium & Battery Tech ETF (LIT) 10 year price chart
November saw a stellar month for lithium producers hitting earnings out of the ballpark, boosted by strong lithium prices.
The strange thing about November was that most lithium miners stock prices did not rise, even SQM fell ~10% the day after announcing record earnings (up 10.5x YTD YoY). Something will have to give as lithium producers forward PE ratios continue to fall into the single digits (Eg: ALB 9.9, SQM 7.0, PLS 6.9). Given analysts use very conservative pricing for their forecasts then one must question why are the lithium producers trading at 2-3x less than the market average (19.4), given we are in the lithium decade with 11-13x demand growth forecast. Looks like a massive disconnect that at some point must close. Or put another way the lithium producers could all double in price and still look reasonably well valued, if lithium prices remain stronger for longer.
Goldman Sachs have already admitted they got their bearish call wrong in 2022, perhaps Morgan Stanley will be next after their 2021 forecast went horribly wrong ("Morgan Stanley expects the price to normalise in the second half of 2022 at $US13,000 a tonne"). Perhaps our Trend Investing forecasts (paywalled) and the real lithium experts are wrong and a global recession or EV sales collapse will have changed everything in 2023. Let's look back in a year and reflect.
Highlights for the month were:
As usual all comments are welcome.
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This article was written by
Disclosure: I/we have a beneficial long position in the shares of GLOBAL X LITHIUM ETF (LIT), AMPLIFY LITHIUM & BATTERY TECHNOLOGY ETF (BATT), ALB, JIANGXI GANFENG LITHIUM [SHE: 2460], ASX:AKE, ASX:PLS, ASX:MIN, LIVENT (LTHM), ADVANCED METALLURGICAL GROUP NV (AMS:AMG), TSX:LAC, ARGOSY MINERALS [ASX:AGY], ASX:LTR, ASX:CXO, ASX:SYA, ASX:PLL, ASX:NMT, ASX:1MC, SIGMA LITHIUM [TSXV:SGMA], VULCAN ENERGY RESOURCES [ASX:VUL], GALAN LITHIUM [ASX:GLN], SAVANNAH RESOURCES [XETRA:SAV], LITHIUM SOUTH DEVELOPMENT CORP. [TSXV:LIS], CRITICAL ELEMENTS LITHIUM [TSXV:CRE], WINSOME RESOURCES [ASX:WR1], INTERNATIONAL LITHIUM [TSXV:ILC], ARENA MINERALS [TSXV:AN], GLOBAL LITHIUM RESOURCES [ASX:GL1], LITHIUM ENERGY LIMITED [ASX:LEL], EUROPEAN METAL HOLDINGS [ASX:EMH], EUROPEAN LITHIUM [ASX:EUR], FRONTIER LITHIUM [TSXV:FL], METALS AUSTRALIA OPTIONS [ASX:MLSOD], GREEN TECHNOLOGY METALS [ASX: GT1], ESSENTIAL METALS [ASX:ESS], AVALON ADVANCED MATERIALS [TSX:AVL], SNOW LAKE LITHIUM (LITM), PATRIOT BATTERY METALS [TSXV:PMET], OCEANA LITHIUM [ASX:OCN], CYGNUS GOLD [ASX:CY5], MINREX RESOURCES [ASX:MRR], MONGER GOLD [ASX:MMG], FREYR BATTERY (FREY) either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.