bad day in the market... but interesting commentary about...

bad day in the market... but interesting commentary about lithium supply fears growing


Rodney Hooper
BEE advisory | Commodity investment research and advisory (EV battery metals)
11 Oct 2018

The SUPPLY alarm bells are ringing for lithium as future demand growth continues.
BMI's GF tracker - 658 GWh - 2023. Translated into demand ~592K MT of lithium in 2023, note 2018 prod~240K MT. Likely 2023 592K MT estimate will grow to +700K MT by 2020 - where will all the supply come from?

Let's look at the "big 4" industry players:
SQM = KDR on hold + SQM's hard rock & LiOH processing skills are in doubt. Atacama water / eco issues.
ALB = Read Joe Lowry's excellent "RDF" article. My takeaway is this - ALB is far more likely to grow its Li prod with a ballpoint pen than a drill bit.
Tianqi = The SQM 24% minority stake purchase is a fiasco. Resistance from SQM & a huge debt to repay. Greenbushes is a positive but likely delays.
Ganfeng = Read Gerrit Fuelling's informative post today on brine challenges. Ganfeng does have cash & expertise but their hands are going to be full with Pilbara SC, LAC etc.
OEM's, given margin concerns, are navigating their way through China ZEV & other global government regs & omission standards by delaying & minimizing EV capex for as long as possible. This strategy is likely to result in a future shortage of battery metals supply and higher input prices. Only avoidable by direct upstream project investments NOW.