Lithium and cobalt prices are experiencing a new period of volatility as prices crest from post-2010 highs. Both speciality minerals that are key components in an electric vehicle’s lithium ion battery began to see a downward turn in 2018.
The Benchmark World Tour 2018 – the world’s leading investor forum for lithium ion supply chain and in its 4th year – explored these themes in Hong Kong, Seoul, Tokyo, Perth, Melbourne and Sydney over the last two weeks. Download presentations from the Benchmark World Tour below.
Lithium industry’s reference price
Lithium price declines have been a long-awaited expectation due to perceived oversupply in the market and some investors are using the China ex-works lithium carbonate price as the proxy for the industry’s state of play.
The reality is that a specific grade of Chinese lithium carbonate has been hit hard by declines for a variety of reasons, but the rest of the world prices and Chinese lithium hydroxide remain robust.
Benchmark Mineral Intelligence sets the lithium industry’s reference price each month to a lithium-specific methodology and it’s the world’s leading independent specialist in the lithium ion battery supply chain.
In China, lithium carbonate expansions in Qinghai from 15,000 tpa to an expected 25,000 to 30,000 tpa LCE in 2018 have proven a major factor in domestic price declines for lower quality – and not battery grade – material.
The August 2018 assessment of Benchmark Minerals’ Lithium Hydroxide, China EXW, 55% min LiOH, stood at a midpoint average of $19,500/tonne. This has fallen 15% from a 2018 high of $23,000/tonne in March 2018.
Yet in the same period Benchmark Minerals’ Lithium Carbonate, 99% Li2CO3, EXW China, Technical Grade price assessment decreased 48% from $22,500/tonne in March 2018 to $11,500/tonne.
“We are at the end of the lithium hype and at the beginning of the real story,” Benchmark Minerals’ Managing Director, Simon Moores, explained to the Seoul and Tokyo World Tour 2018 delegates.
“Sentiment has driven much of the lower quality lithium carbonate prices down rather than just new supply from China. Yet, rest of the world prices and medium-term contracts are more robust”.
“We believe any softness in lithium price will be used as an ideal moment to secure long-term deals which in turn will support stronger medium-term lithium prices,” he added.
Cobalt’s cash flow problems
Cobalt has had a tougher 2018 compared to lithium with price decreases being the main industry theme of 2018.
Benchmark Minerals’ Cobalt Sulphate, 20.5% CoSO4, EXW China price assessment peaked in April 2018 at a mid-point average of $22,515/tonne and has declined to $13,870/tonne in our latest assessment in August 2018.
Experiencing a similar trajectory, Benchmark Minerals’ Cobalt Battery Metal, 99.8%, EXW Europe price assessment peaked at $96,177/tonne in April 2018 and has fallen to $74,405/tonne in August 2018.
Benchmark believes the issue with cobalt began at the end of last year when payables for cobalt hydroxide increased sharply under new supply contract negotiations that were eating into refiners’ margins.
With a backdrop of rising prices, some parts of the supply chain changed payment terms to upfront before delivery where previously they invoiced after delivery.
“Cashflow has become an ever-increasing problem in cobalt and has impacted buying patterns which has resulted in hand to mouth purchasing,” Benchmark’s Cobalt & Cathodes Analyst, Caspar Rawles explained to Australian World Tour 2018 delegates.
“At the same time Chinese deleveraging has impacted what little credit is available. Sentiment began to shift in China in April and remains in a similar position today,” he added.
Other demand-side factors that have affected cobalt’s price fortunes include China’s introduction of a new subsidy policy that has further impacted raw material purchases as lithium ion battery cell and auto manufacturers adjusted to the new policy.
Vanadium’s lithium ion moment
Vanadium made its debut appearance on the Benchmark World Tour 2018 as the discussion around the energy storage market heated up.
The recent success of lithium ion batteries being deployed in increasing larger systems that are exceeding 1GWh has brought to light the huge potential of the market for all types of battery technologies.
Vanadium flow technology has, for many years, been a favoured technology to enter this space in a serious way and Benchmark forecasts that it could be a major player in this market, second to lithium ion.
“If a vanadium battery producer steps forward with bold plans to produce vanadium flow at mass scale, giving the industry its Elon Musk for lithium ion moment, the potential for the technology to be the second most deployed ESS battery in the world is there,” Benchmark’s Simon Moores explained.
“Raw material self sufficiency is a critical component to this. At least a third of the cost of a vanadium flow battery is the raw material vanadium pentoxide which makes up the liquid electrolyte.
“If companies are thinking of creating the Gigafactory of vanadium flow batteries, they will either need to own a mine or implement a new pricing system where the fully recyclable vanadium in the battery is leased,” Moores added.
Should all of vanadium’s supply chain challenges be solved, Benchmark believes 25% of the energy storage market is up for grabs in 2028 and it forecasts that the energy storage market will then be between 100GWh to 120GWh in size.
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Download World Tour 2018 Presentations
Hong Kong, Monday 10 September 2018
Beautiful morning in #HongKong to set the stage for @benchmarkmin World Tour at the Hong Kong Football Club pic.twitter.com/6Hva5Tg4O0
— Jay Roberge (@jmroberge) September 10, 2018
Cobalt & Cathodes: How are cathode materials evolving to deal with the cobalt conundrum? | Caspar Rawles, Analyst, Benchmark Mineral Intelligence (FREE DOWNLOAD – usually subscriber only access, email Rob Nichols at [email protected] )
Standard Lithium – Robert Mintak, CEO & Director
Neometals – Michael Tamlin, COO
Battery Minerals Ltd – David Flanagan, Managing Director
Savannah Resources – David Archer, CEO
Lake Resources NL – Steve Promnitz, Managing Director
Battery recycling is getting serious | Impact of secondary materials on the lithium ion value chain | Hans Eric Melin, Director, Circular Energy Storage (Subscriber only access, email Rob Nichols at [email protected] )
Seoul, Wednesday 12 September 2018
Asia stop #2 for the @benchmarkmin World Tour in Seoul – the latest market updates on #lithium #cobalt #graphite #lihtiumion and energy storage pic.twitter.com/xEQZa02D56
— Caspar Rawles (@CDMRawles) September 11, 2018
How Benchmark Minerals is enabling a new lithium price mechanism for the EV revolution | Simon Moores, Managing Director, Benchmark Mineral Intelligence (FREE DOWNLOAD – usually subscriber only access, email Rob Nichols at [email protected] )
Lake Resources NL – Steve Promnitz, Managing Director
Cobalt 27 – Martin Vydra, Head of Strategy
Neometals – Michael Tamlin, COO
First Cobalt – Trent Mell, President & CEO
What can compete with lithium ion batteries in EVs and Energy Storage and by when? | Caspar Rawles, Analyst, Benchmark Mineral Intelligence (FREE DOWNLOAD – usually subscriber only access, email Rob Nichols at [email protected] )
Tokyo, Friday 14 September 2018
https://twitter.com/sdmoores/status/1040509953369239553
How Benchmark Minerals is enabling a new lithium price mechanism for the EV revolution | Simon Moores, Managing Director, Benchmark Mineral Intelligence (FREE DOWNLOAD – usually subscriber only access, email Rob Nichols at [email protected] )
The battery and EV supply chain perspective from an Auto major | Kazuhiro Araki, Assistant Chief Engineer, Honda R&D (Subscriber only access, email Rob Nichols at [email protected] )
Neometals – Michael Tamlin, COO
Lake Resources NL – Steve Promnitz, Managing Director
Standard Lithium – Robert Mintak, CEO & Director
Cobalt 27 – Martin Vydra, Head of Strategy
First Cobalt – Trent Mell, President & CEO
What can compete with lithium ion batteries in EVs and Energy Storage and by when? Caspar Rawles, Analyst, Benchmark Mineral Intelligence (FREE DOWNLOAD – usually subscriber only access, email Rob Nichols at [email protected] )
Perth, Monday 17 September 2018
“We are now set to be a key contributor to the low cost, high quality lithium hydroxide market. And our tonnes are pouring out” Ken Brinsden, @PilbaraMinerals #EV #Benchmark2018 World Tour Perth pic.twitter.com/JdGztdvKCG
— Benchmark Minerals (@benchmarkmin) September 17, 2018
Have we underestimated the energy storage market? Sam Jaffe, Managing Director, Cairn Energy Research Advisors (Subscriber only access, email Rob Nichols at [email protected] )
Pilbara Minerals – Pilgangoora and the Hard Rock Revolution | Ken Brinsden, Managing Director & CEO, Pilbara Minerals Limited
Standard Lithium – Robert Mintak, CEO & Director
Hexagon Resources – Mike Rosenstreich, Managing Director
Fortune Minerals – Robin Goad, President & CEO
21st Century Vanadium: Raw Material Security, spiking prices and impact on ESS | Vincent Algar, Managing Director, Australian Vanadium
Lithium: The Pathway to One Million Tonnes | Chris Berry, President, House Mountain Partners LLC (FREE DOWNLOAD – usually subscriber only access, email Rob Nichols at [email protected] )
Celsius Resources – Brendan Borg, Managing Director
Global Geoscience – Bernard Rowe, Managing Director
How are battery technologies changing EV and stationary storage? Simon Moores, Managing Director, Benchmark Mineral Intelligence (FREE DOWNLOAD – usually subscriber only access, email Rob Nichols at [email protected]enchmarkminerals.com )
Cobalt & Cathodes: How are cathode materials evolving to deal with the cobalt conundrum? Caspar Rawles, Analyst, Benchmark Mineral Intelligence (FREE DOWNLOAD – usually subscriber only access, email Rob Nichols at [email protected] )
Melbourne, Wednesday 20 September 2018
MD @VincentAlgar presenting to a packed room in Melbourne for the @benchmarkmin #Benchmark2018 World Tour #vanadium $AVL pic.twitter.com/LVUAPUCkZi
— Australian Vanadium (@AusVanadium) September 19, 2018
Have we underestimated the energy storage market? Sam Jaffe, Managing Director, Cairn Energy Research Advisors (Subscriber only access, email Rob Nichols at [email protected] )
Pilbara Minerals – Pilgangoora and the Hard Rock Revolution | Dale Henderson, Chief Operating Officer, Pilbara Minerals Limited
Global Geoscience – Bernard Rowe, Managing Director
Fortune Minerals – Robin Goad, President & CEO
Celsius Resources – Brendan Borg, Managing Director
21st Century Vanadium: Raw Material Security, spiking prices and impact on ESS | Vincent Algar, Managing Director, Australian VanadiumLimited
Cobalt & Cathodes: How are cathode materials evolving to deal with the cobalt conundrum? Caspar Rawles, Analyst, Benchmark Mineral Intelligence (FREE DOWNLOAD – usually subscriber only access, email Rob Nichols at [email protected] )
Core Exploration – Stephen Biggins, Managing Director
Standard Lithium – Robert Mintak, CEO & Director
Piedmont Lithium – Keith Phillips, President & CEO
Graphite evolution: The rise of the world’s biggest graphite mine | Shaun Verner, Managing Director, Syrah Resources
Lithium: The Pathway to One Million Tonnes | Chris Berry, President, House Mountain Partners LLC (FREE DOWNLOAD – Subscriber only access, email Rob Nichols at [email protected] )
What can compete with lithium ion batteries in EVs and Energy Storage and by when? Simon Moores, Managing Director, Benchmark Mineral Intelligence (FREE DOWNLOAD – usually subscriber only access, email Rob Nichols at [email protected] )
Sydney, Friday 22 September 2018
Happy to welcome our largest ever @benchmarkmin World Tour audience to Sydney today (overspill room needed) Huge interest here in #cobalt #lithium #graphite #vanadium #lithiumion pic.twitter.com/KSGCXR6cSI
— Caspar Rawles (@CDMRawles) September 20, 2018
What can compete with lithium ion batteries in EVs and Energy Storage and by when? Simon Moores, Managing Director, Benchmark Mineral Intelligence (FREE DOWNLOAD – usually subscriber only access, email Rob Nichols at [email protected] )
The Battery Revolution | Lachlan Shaw, Global Commodity Strategist, UBS
21st Century Vanadium: Raw Material Security, spiking prices and impact on ESS | Vincent Algar, Managing Director, Australian Vanadium Limited
Core Exploration – Stephen Biggins, Managing Director
Standard Lithium – Robert Mintak, CEO & Director
Battery Minerals Ltd – David Flanagan, Managing Director
Pilbara Minerals – Pilgangoora and the Hard Rock Revolution | Ken Brinsden, Managing Director & CEO, Pilbara Minerals Limited
Have we underestimated the energy storage market? Sam Jaffe, Managing Director, Cairn Energy Research Advisors (FREE DOWNLOAD – usually subscriber only access, email Rob Nichols at [email protected] )
Celsius Resources – Brendan Borg, Managing Director
Fortune Minerals – Robin Goad, President & CEO
Global Geoscience – Roger Howe, Manager, Corporate and Investor Relations
Cobalt & Cathodes: How are cathode materials evolving to deal with the cobalt conundrum? Caspar Rawles, Analyst, Benchmark Mineral Intelligence(FREE DOWNLOAD – usually subscriber only access, email Rob Nichols at [email protected] )
Piedmont Lithium – Keith Phillips, President & CEO
Lake Resources – Steve Promnitz, Managing Director
Blackstone Minerals – Scott Williamson, Managing Director
Lithium: The Pathway to One Million Tonnes | Chris Berry, President, House Mountain Partners LLC (FREE DOWNLOAD – usually subscriber only access, email Rob Nichols at [email protected] )