At this year’s Lithium Supply & Markets Conference in Chile, the Investing News Network spoke with battery metals expert Chris Berry, founder of House Mountain Partners, about the main trends in the lithium space in 2019.
Speaking about the top theme this year, Berry pointed to concerns about pricing.
“Are we at the bottom with respect to lithium? That’s really the name of the game right now,” he said. “The generalist investors believe in the electric vehicle theme, but until they get some clarity on when pricing levels out everyone is on the sidelines.”
A big topic of discussion this week has been the news that the London Metal Exchange (LME) has chosen price reporting agency Fastmarkets to develop a lithium futures contract, with an emphasis on the transparency it could bring to the sector.
“Transparency is a good thing in any sector, especially in pricing. Lithium has always been an oligopoly that has controlled price, but with demand reaching 1 million tonnes by 2025, that is starting to change with the new producers entering the market,” Berry said.
But will the lithium contract help? That will depend on what investors do, according to the expert.
“Will they embrace this contract? If the LME cobalt is any indication, I am not too optimistic,” he added. “Another thing you want to make sure to make the contract a success is pricing buy in from all the producers, and it doesn’t sound like Albemarle (NYSE:ALB) is going to be contributing.”
Berry also shared his insight as to why investors should keep an eye on prices from a directional perspective and what he expects to happen with lithium hydroxide and lithium carbonate.
Security of raw materials and vertically integrated supply chains in countries outside of Asia have also been topics of discussion this year, with the US under the spotlight in the first few months of 2019. Berry explained why Asia, in particular China, remains a big player and discussed whether pursuing this vertically integrated supply chain strategy is worth it for countries like Australia or Chile.
Watch the video above for more insights from Berry. You can also click here to watch our full Lithium Supply & Markets Conference playlist on YouTube.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
