Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Quote  |  Bullboard  |  News  |  Opinion  |  Profile  |  Peers  |  Filings  |  Financials  |  Options  |  Price History  |  Ratios  |  Ownership  |  Insiders  |  Valuation

International Battery Metals Ltd V.IBAT

Alternate Symbol(s):  IBATF

International Battery Metals Ltd. (IBAT) is a Canada-based advanced technology and manufacturing company. The Company is focused on environmentally responsible methods of extracting lithium compounds from brine. The Company provides its technology and equipment to holders of resource properties such as oilfield brines, subsurface brine aquifers and industrial customers who have lithium rich brine by products from their operations. The Company’s operations consist of the development of a modular direct lithium extraction plant (MDLE Plant). The MDLE Plant is designed to process brine solutions to extract lithium chloride which can be further processed into lithium carbonate and used for industrial purposes or as a battery component. The Company constructed the first MDLE Plant in Lake Charles, Louisiana.


TSXV:IBAT - Post by User

Post by flyer4on Mar 16, 2018 11:09am
93 Views
Post# 27727393

New study rips into cobalt, lithium price bulls

New study rips into cobalt, lithium price bulls

New study rips into cobalt, lithium price bulls

At the end of February Morgan Stanley sent shares of lithium producers and explorers tumbling after the investment bank forecast a huge surplus in the market for the battery raw material in 2022, resulting in forecast prices nearly halving from today’s levels.

The negative assessment raised eyebrows in the industry with executives criticizing Morgan Stanley for vastly underestimating the rise in demand, production ramp-up problems and bottlenecks with processing of battery-grade lithium compounds.

But this week another voice was added to the bear camp on lithium (and cobalt, where hype has reached an even higher pitch).

Prominent commodities research house Wood Mackenzie this week released a report on battery materials that forecasts a decline in the price of cobalt and lithium this year which would turn into a rout from 2019 onwards.

For 2019 and beyond, supply will start to outpace demand more aggressively and price levels will decline in turn

Woodmac is not lowballing demand growth for lithium and the authors expect demand to grow from 233 kilotonnes (kt) in 2017 to 330kt of lithium carbonate equivalent in 2020 and 405kt in 2022, but:

… the supply response is under way. Yet it will take some time for this new capacity to materialise as battery-grade chemicals. As such, we expect relatively high price levels to be maintained over 2018. However, for 2019 and beyond, supply will start to outpace demand more aggressively and price levels will decline in turn.

According to Woodmac data, spot lithium carbonate prices on the domestic market in China are already down 6% from December levels to around $24,500 a tonne while international market prices have remained robust rising to $16,000 at the end of February.

The London-based consulting firm sees prices averaging roughly $13,000 this year, dropping to below $9,000 in 2019. By 2022 lithium carbonate is forecast to average $6,500.

Cobalt collapse

The outlook for cobalt is hardly rosier.

On Thursday cobalt quoted on the LME moved higher again setting fresh near-decade highs of $85,000 a tonne, up 70% from this time last year.

According to the report cobalt demand reached 104kt last year with nearly half destined for battery makers. The market will grow by an additional 9% this year to reach 113kt says Woodmac and by 2022 forecast cobalt demand from batteries alone is predicted to reach 98kt – or 61% of the overall cobalt market:

While such a figure would have seemed unrealistic a few months ago, the incremental supply from Glencore, ERG and others now means that we expect significant surpluses in the years 2019 to 2022.

Naturally, these surpluses will have a downwards effect on price levels. While the likes of Glencore are unlikely to see these excess tonnages fully shipped, the potential supply, together with stock build of hydroxide or metals/chemicals through the value chain, will likely keep a cap on price levels.

Woodmac expects prices to average a respectable $75,000 a tonne this year before easing back to $55,000 a tonne in 2019 before falling further to a low of little over $33,000 in 2020 and 2021.

Nickel narrative

Nickel demand from batteries for electric vehicles and energy storage is set to more than double from 2016 to 112kt in 2020

Nickel, where EVs hardly registers on the demand side compared to steelmaking, have also benefitted from the excitement surrounding battery materials with the metal up 12% to $13,750 a tonne so far in 2018 following a 25% jump last year.

Woodmac is more sanguine about the outlook for nickel where demand from batteries for electric vehicles and energy storage is set to more than double from 50kt in 2016 to 112kt in 2020. That’s still less than 5% of overall nickel demand.

The authors argue that although nickel stocks may continue their decline through 2018, that trend might slow down in 2019-20 as “increases in supply will reduce the global deficit in those years to levels close to balance.”

Woodmac believes nickel prices will moderate in 2019 but from the latter part of next year and through most of 2020, the firm anticipate nickel prices trading within the established range of $12,000–14,000:

However, as the market looks ahead to the return of deepening consecutive annual deficits from 2021, prices above $15,000/t ($6.80/lb) may be achievable in the final quarter of 2020.

Bullboard Posts