AOTH----EV predictions show strained metals supply

[Buck]

Even though 365 years of reserve supply sounds very comforting, the point of the EV and stationary storage revolutions is that current demand will shoot up, way up, if these revolutions do happen. The 100 Gigafactories scenario could come true. And if that happens, the 365-year supply would be less than a 17-year supply (13.5 million tons of reserves divided by 800,000 = 16.9 years).

https://www.greentechmedia.com/arti...ntain-the-growth-of-the-lithium-ion-battery-m

i'm thinking exponentially here and these guys tell another story ^ ^

they speak of Hunky never meeting Dory



what will the miners do then

 

[gnome]

Even though 365 years of reserve supply sounds very comforting, the point of the EV and stationary storage revolutions is that current demand will shoot up, way up, if these revolutions do happen. The 100 Gigafactories scenario could come true. And if that happens, the 365-year supply would be less than a 17-year supply (13.5 million tons of reserves divided by 800,000 = 16.9 years).

https://www.greentechmedia.com/arti...ntain-the-growth-of-the-lithium-ion-battery-m

i'm thinking exponentially here and these guys tell another story ^ ^

they speak of Hunky never meeting Dory



what will the miners do then

Lithium is incredibly abundant mineral, so it's more a matter of how fast and at what price it can be produced and processed.
Like oil, new ways to extract lithium will keep the spice flowing. Unlike oil, lithium is readily recyclable.

Wish that article was updated since 2015, especially in light of battery day - rather than gigafactories, they are planning more like 10 terafactories.
Smaller footprint, faster run rate.
https://cleantechnica.com/2020/09/24/tesla-pilot-battery-factory-13th-largest-in-world/

Tesla reaffirmed guidance it will produce 500,000 vehicles this year, so right on track for their targets from 6 years ago.
Next year they are looking at between 700,000 and 1,000,000 vehicles. (50-100% growth YOY)

VW is going big on EV's, there are dozens of chinese makers, the rivians and all the OEM's are doing at least a couple of EV models.

 

[everything]

I took a peak at commodities the last day or two, most everything got hammered, nickel held up though!

Asia will be selling many parts for EV is my guess, I heard EV parts will be better returns, maybe who knows.

Wow, lithium was a great play this year, but heck what wasn't, Nasdaq, GLD, LNG, or NG doubled in just the last month.

 

[gnome]

I took a peak at commodities the last day or two, most everything got hammered, nickel held up though!

Asia will be selling many parts for EV is my guess, I heard EV parts will be better returns, maybe who knows.

Wow, lithium was a great play this year, but heck what wasn't, Nasdaq, GLD, LNG, or NG doubled in just the last month.

EV's don't have parts. Well, about 10x less moving parts than an ICE machine. ( less cost for maintenance and repairs).

Any of the bigger OEMs will make their own electric motors.
Other than Tesla, NVIDIA owns the market for AI chips.
There are some electronics regulating the batteries.
Otherwise seats and wheels and dashboards aren't particularly unique to EV's.
Other than batteries, I'm not sure what parts one would invest in.

The top battery producers in the world are asian: Panasonic (Japan), LG Chem (Korea), CATL (China) and one more chinese company. Europe has Nordvolt, but it's not that big. The US has only Tesla, which aims to become the largest battery producer in the world.

LIT etf covers battery makers and lithium miners. I've done OK trading it.

 

[gnome]

a bearish viewpoint

https://finance.yahoo.com/news/rpt-column-nickel-surplus-looms-010000615.html
Nickel surplus looms as electric vehicle buzz fades: Andy Home
Andy Home
Tue, October 27, 2020, 6:00 PM PDT
(Repeats Oct. 27 column with no changes. The opinions expressed here are those of the author, a columnist for Reuters)

* INSG nickel market balances: https://tmsnrt.rs/3jw7CXW

By Andy Home


LONDON, Oct 27 (Reuters) - The London Metal Exchange (LME) nickel price last week touched a year-to-date high of $16,135 per tonne.

Nickel bulls would love to believe this is all about rising usage in lithium-ion batteries for electric vehicles. The EV story has generated a tangible buzz in the nickel market over the last two years with Tesla's Elon Musk recently fanning the flames with his call for more mines to meet demand for electrification.

However, the reality is that the recent rally is much more about that most traditional of price drivers, namely the supply of nickel ore to China's giant stainless steel sector.

Such old-school dynamics are going to push the global market into a period of over-supply this year and next, according to the latest forecasts from the International Nickel Study Group (INSG).

The EV narrative, for now at least, is stuck in the slow lane.

ALL ABOUT ORE

The key metric to understanding the recent nickel price rally is the cost of nickel ore, according to analysts at Citi.

The Philippines has emerged as the main supplier of raw material to China's nickel pig iron (NPI) producers since Indonesia banned exports at the start of this year.

The price of medium-grade Philippine ore has doubled over the course of this year to a current $74 per tonne, according to Chinese research house Custeel.

That in turn feeds directly into higher costs for the NPI producers that supply China's stainless steel mills.

The Indonesian ore ban is reaching "its climax" with Chinese stocks falling to "critical levels" and the Philippines heading into the monsoon season, which limits mining activity, Citi said.

The bank has a "bull-case" price target of $17,000 per tonne in the fourth quarter of this year but "from these highs we would be ready to flip cautious-bearish."

That's because China's NPI production is declining as the supply chain migrates to Indonesia, which implemented its ore ban to force miners to upgrade to value-added products such as NPI.

This year "likely marks the last year when China will produce more NPI than Indonesia," agrees JPMorgan.

The transition will see flows of Indonesian NPI become the dominant trade for Chinese stainless production.

Philippine ore prices will likely revert back to historical norms of around $35 per tonne which "will depress costs of marginal Chinese NPI smelters to around $13,000/t, thus removing the cost support for spot nickel prices," JPMorgan said. ("Metals Weekly", Oct. 26 2020)

SURPLUS AHEAD

Such traditional nickel price drivers, particularly the strength of global stainless steel output, will dominate the market for a while yet.

Global output of stainless steel fell by 9.4% in the first half of this year and will fall over the year as a whole despite a rebound in China, the INSG said.

Next year should be a year of recovery but by how much is very uncertain outside of China, where the consensus is for this year's V-shaped recovery to level out.

Global nickel production, by contrast, has been relatively unscathed by the lockdowns that have hit other industrial metals and will grow strongly next year as Indonesia's reconfigured nickel production sector ramps up.

The INSG now sees world output of primary metal at 2.436 million tonnes this year, a marginal 40,000-tonne reduction from the Group's last forecast in October 2019. Production growth will accelerate from 2.3% this year to 6.2% next year.

The Group therefore expects the refined nickel market to register supply surpluses of 117,000 tonnes this year and another 68,000 tonnes in 2021.

These will be the first years of excess supply since 2015.

EV SLOW LANE

What then of nickel's EV story?

It seems to be losing some of its traction, according to LME broker Marex Spectron.

Interest in nickel and electric vehicles peaked early in October and "has reversed noticeably since then", according to what the company calls its "Nowcast", a series of algorithms that trawl the web to monitor around a billion text documents per year for references between specific commodities and market themes.

"This begs the question of whether the recent reversal in EV Market Focus portends a declining interest in the key demand story for the metal," Marex said. ("Quantamental Update - Has the focus on EV as a key nickel demand driver peaked?", Oct. 26, 2020).

This might seem counter-intuitive given all the headlines generated by Musk's call for more nickel mines.

But COVID-19 has laid low the entire automotive sector, even if EV production is bouncing back more strongly than conventional vehicles as governments prioritise "green" investment in their recovery plans.

Electric vehicles currently account for less than 5% of total nickel usage and the fear, to quote Macquarie Bank analysts, is the coronavirus will translate into "two lost years for the electric vehicle market, pushing back the requirements for new nickel supply (...) all the way out to 2025."

This theme of deferred expectations has been playing out across the battery metals space, witness this week's news that Australian hard-rock lithium miner Altura Mining has entered receivership due to low prices for its spodumene product.

Nickel's role in the EV revolution has also taken something of a dent from Tesla itself, which is using non-nickel batteries in its Model 3 cars in China. The switch to lithium-iron-phosphate batteries reduces costs but also reflects technical enhancements to a product that was regarded as legacy technology just a year ago.

It is becoming clear that battery design is not going to be a binary competition such as the much-cited 1980s battle between Betamax and VHS in video-taping. Rather, multiple technologies will co-exist to feed a differentiated global market for vehicle functionality.

This is not to say that EVs won't be a critical component of the nickel market going forwards, just that the relationship between sales growth and nickel usage may not be as linear as previously thought.

Nickel bulls may have to defer their great EV expectations for a while yet and focus on what is happening in the currently far more significant stainless steel sector. If the INSG is right, it could be a bumpy ride.

(Editing by David Evans)

 

[gnome]

 

[everything]

EV's don't have parts. Well, about 10x less moving parts than an ICE machine. ( less cost for maintenance and repairs). Thanks for a great post. - Thus a nearer to one million mile car, every other whatever is going to want one. I listened to a talk about the afterlife of EV batteries. The guy said cobalt is also a very dirty mineral needed for these.

www.byd.com ? They make a blade battery they use in their buses, Iron posphate?

https://insideevs.com/news/427640/byd-shown-blade-battery-factory-chongqing/

Any of the bigger OEMs will make their own electric motors.
Other than Tesla, NVIDIA owns the market for AI chips.
There are some electronics regulating the batteries.
Otherwise seats and wheels and dashboards aren't particularly unique to EV's.
Other than batteries, I'm not sure what parts one would invest in.

The top battery producers in the world are asian: Panasonic (Japan), LG Chem (Korea), CATL (China) and one more chinese company. Europe has Nordvolt, but it's not that big. The US has only Tesla, which aims to become the largest battery producer in the world.

LIT etf covers battery makers and lithium miners. I've done OK trading it.

 

[gnome]

Yes, there are multiple battery chemistries out now that will last over 3000 charge cycles, which would get you a million miles. So they are suitable for fleet vehicles or hand-me-down vehicles. Yes, they can be repurposed for stationary storage or recycled.

Lithium Iron Phosphate (LFP) is used by several companies, including BYD and CATL which are the big Chinese battery co's. Tesla just started putting CATL's LFP batteries in some of their made-in-china Model 3's.

LFP batteries have long cycle life and are cheap to produce because they have no cobalt, the minerals are in abundant supply.
The downside to LFP is that they are heavy relative to energy density. So the tradeoff is low price and long cycle life, but you sacrifice a bit on range and performance.

If you want to get geeky about charge cycles, Jeff Dahn is the guy.

 

[everything]

It appears that cobalt shifted the EV battery industry?
https://www.greentechmedia.com/articles/read/11-lithium-ion-battery-makers-that-dont-need-cobalt

 

[gnome]

It appears that cobalt shifted the EV battery industry?
https://www.greentechmedia.com/articles/read/11-lithium-ion-battery-makers-that-dont-need-cobalt

It's a tradeoff. Cobalt makes for higher energy density, thus longer range, but it's expensive and some of it mined with very bad labor conditions.
It'll probably continue to be a part of high-performance vehicles like Porsche Taycan, Tesla Model S, Roadster, Tesla Semi, etc. where performance is more the issue than price. But for lower-cost vehicles or uses that don't require 300 miles+ range (busses, robotaxis, commuter cars), LFP will be considered "good enough". CleanTechnica is a good site.

 

[gnome]

Bought the most recent dip to $25. Not a bad move so far, should probably sell, but I'm greedy and aiming for $100 within a year.

 

[everything]

Definitely. NIO was around 20 something when JP put a 40 target so definitely it was on it's way up.

 

[gnome]

Definitely. NIO was around 20 something when JP put a 40 target so definitely it was on it's way up.

$48 today, hoping it enters a trading range so I can accumulate more.

 

[gnome]

Quick Picks & Lists
My Top 2 Battery Metal Miners For Lithium, Cobalt, Nickel; 1 For Graphite And Manganese

Nov. 15, 2020 12:57 AM ET|123 comments | Includes: AMMCF, BATT, BBL, BHP, BHPBF, BHPLF, FTSSF, GALXF, GBLEF, GLNCF, IPGDF, JRVMF, LAC, MNXXF, NTTHF, SRHYY, SYAAF, TSLA, VALE
Matt Bohlsen

Summary
Two recent events have boosted the battery metal miners - Rapidly improving EV sales especially in Europe and China; plus Tesla's Battery Day enormous forecasts for future battery production.

A battery metals miner's super-cycle looks set to begin soon.

My order of preference for the battery metals and my top two miners for each (one for graphite, and one for manganese).

This article first appeared on Trend Investing on October 13, 2020, but has been updated for this article today.

A combination of two recent events has seen demand for EV metal miners begin to significantly pick up:

1) Rapidly improving electric vehicle [EV] sales especially in Europe but also in China. Details are here.

2) Tesla's (TSLA) Battery Day's enormous forecasts for future battery production. Tesla plans to go from 0.035TWh (35GWh) pa of battery production in 2019 to 3TWh pa by 2030, for a 86x increase. Furthermore Tesla indicated the world would need to grow from current levels of 0.23TWh (230GWh) pa (Bloomberg estimate) to get to 20TWh pa, also representing an 86x increase, for the world to be 100% EVs (10TWh) and the grid to support 100% renewable energy with battery storage (10TWh). If this was to occur by 2030, at that time the world would need 55x more lithium (than 2019 levels), 20x more cobalt, 26x more graphite, and 7x more nickel. You can read more on this in my article here.

A battery metals miner's super-cycle looks set to begin soon

With a potential super-cycle of battery metals demand set to begin and run for 1-2 decades, I take a look at my current top 2 battery metal miners for each of the key battery metals. In choosing my top 2, I consider the companies quality and growth potential to expand to meet the expected demand surge post 2023.

Of course in such a super-cycle of demand most of the quality battery metal miners can do very well. There are many others not mentioned in this article that can do very well. Here for article brevity I select just two, and for graphite and manganese just one each.

My order of preference for the battery metals

In order of preference for the battery metals here is my current order of most preferred to least preferred: Lithium, cobalt, nickel, graphite, and manganese. Lithium is my most preferred as it is used in all battery options (EVs, energy storage etc) and has the strongest forecast demand increase, is a small market, and is unlikely to be substituted. Cobalt is my second favorite because it is rare, a small market, and has limited supply. Risk of being partially replaced by other chemistries [LFP, NM] is something to keep in mind. Nickel in battery grade is also likely to see supply side limitations and strong demand, but the overall nickel market is large making the battery demand impact lower. Graphite and manganese are both large markets and can be quite well supplied. The anode precursor market (spherical battery grade graphite) is a much smaller market and gives producers the edge over manganese miners for my rankings.

continued at the link:
https://seekingalpha.com/article/43...um-cobalt-nickel-1-for-graphite-and-manganese

 

[gnome]

Good interview on the mining side, if you can tolerate the Tesla cheerleading.

Bottom line: Demand is rising sharply but battery makers are not willing to pay the prices to get lithium miners to increase production. There will be a price spike by 2022 at the latest.

 

[gnome]

Speculation that Tesla will do a deal with Vale mining.