See the complete compilation of our coverage from the 2019 Lithium Supply & Markets Conference in Santiago, Chile.
This year’s Lithium Supply & Markets Conference in Santiago, Chile had plenty of presentations, panel discussions and experts willing to share their knowledge with an eager audience.
The Investing News Network (INN) kept busy at the event, which ran from June 10 to 12, engaging with companies, attending panel discussions and, of course, interviewing industry experts.
For everything you need to know on investing in the lithium space, here is INN’s full recap of the 2019 Lithium Supply & Markets Conference.
If you missed the Lithium Supply & Markets Conference, don’t worry — we’ve put together an overview of what happened at the event.
Lithium prices and the LME lithium contract
Tianqi Lithium (SZSE:002466) President Vivian Wu said lithium demand is solid and the industry is taking the time to adapt to new sustainable growth.
Speaking about the top theme this year, Chris Berry of House Mountain Partners 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 (EV) theme, but until they get some clarity on when pricing levels out, everyone is on the sidelines.”
Despite growing demand from the EV space, lithium prices have been struggling and investor sentiment has seen a downturn. Addressing those issues, Daniela Desormeaux of SignumBOX said she sees today’s lower prices as a rebalancing of the market.
The London Metal Exchange (LME) spent 18 months looking for a partner for what will become the first lithium futures contract. The move is expected to bring more transparency to lithium prices, which have been under pressure in the past several months.
INN talked to experts about the LME’s efforts to launch a lithium contract to bring price transparenxcy to the sector.
According to William Adams, head of base metals and battery research at Fastmarkets, the recent deal between Fastmarkets and the LME to provide a reference price for a new lithium contract will help smooth the flow of lithium down the supply chain.
Lithium market and investments
Earlier this year, the lithium space saw diversified company Wesfarmers (ASX:WES,OTC Pink:WFAFF) make a AU$776 million takeover offer for Australian lithium developer Kidman Resources (ASX:KDR,OTC Pink:KDDRF), with many investors wondering if this acquisition trend will continue.
“I think we will see more of (those deals) going forward,” Joe Lowry of Global Lithium said. “I think it was great because we need another big player in the market.”
Much more investment is going to be needed in the lithium sector in order for a projected surge in demand for batteries to be met, according to Andrew Miller, who is the head of price assessment at Benchmark Mineral Intelligence.
“The industry is at a point now to meet the demand growth of 2022, 2023, (but) significant amounts of capital need to start going into the market in the next six to 18 months, really, so I think that’s a real challenge for the rest of the world,” he said.
For Senior Analyst at Benchmark Mineral Intelligence Jose Hofer, even though the market might experience some oversupply in the short term, it will start to tighten in the next three years as it becomes harder for supply to keep up with increasing demand.
“In the next seven years, we will see demand reach at least 1 million tonnes of lithium carbonate equivalent,” he said. “That is a huge amount of material that needs to be mined, that needs to be processed and converted to chemicals in a secure and stable way.”
Alex Cheeseman of Altura Mining (ASX:AJM,OTC Pink:ALTAF) discussed sentiment in the lithium space and where his company is headed next.
“There’s such huge and growing demand over the next few years — I think it really is just a small soft period at the moment that we’ll see lift in the very near future.”
The future of lithium hydroxide and lithium carbonate
INN spoke to lithium experts about what the future holds for lithium hydroxide versus lithium carbonate demand and prices.
INN caught up with lithium consultant Rodney Hooper, who is also co-host of the Lithium-ion Rocks! Podcast.
“I think the death of carbonate was a bit premature; the adoption of nickel–cobalt–manganese 811 cathodes was not as aggressive as expected,” he said. “The transition to hydroxide hasn’t been as quick.”
Developing lithium supply chains
Battery metals analysts talk about countries outside of China developing vertically integrated strategies and whether it is a wise move for all.
Founder of RK Equity Howard Klein believes it is absolutely essential for North America and Europe to develop their lithium resources and nail down a supply chain outside of China to ensure the stable future of the commodity.
“Just think about what China did with rare earths — we cannot have all of lithium chemical production, or a very significant component of that, in China,” he said.
Martin Steinbild, director of lithium development at Savannah Resources (LSE:SAV), said that, given Europe’s position as the world’s second largest market for EVs, it is important that a lithium supply chain be established there.
According to Vincent Ledoux-Pedailles, executive director of corporate strategy at Infinity Lithium (ASX:INF), the continent’s goal is to have a fully integrated lithium supply chain, from mining to the production of EVs.
“We’re asking Europe to be producing a large amount of lithium, and at the moment you’ve got nothing in Europe,” he said. “So there’s a long investment needed within the continent to start producing lithium chemicals as soon as possible.”
New battery technologies
The year hasn’t started off well for lithium, but Emily Hersh, managing partner at DCDB Group, still sees potential in the industry — at least for those who do their homework.
“If a lithium extraction technology can’t talk meaningfully to the energy availability and costs — the availability of this tech to work under different temperature settings and different pressure settings — we’re not going to see it commercialized for a long time. It’s the reality,” she said.
Lux Research Senior Research Associate Chloe Holzinger shared her thoughts and insight on what to expect in the battery space.
“Solid-state batteries are still very much in the research phase,” she said. “I think one of the key areas of improvement moving forward is going to be on the development of metallic lithium anodes.”
“One of the trends we’ve seen in the past year has been the collapse of lithium and cobalt prices,” he said. “However, we’ve seen phenomenal demand for the product.”
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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 contributed article. 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.