Understanding the Current Dynamic for Lithium
- Courriel
-
Signet
-
Imprimer
Le contenu de cet article sera accessible en français à une date ultérieure. Restez à l’affût!
The demands of the energy transition and supply realities will likely support lithium markets this year, but greater supply chain efficiencies will be needed over the long term.
These themes were in focus during the “Lithium Shock Talk” panel at the BMO Capital Markets 33rd Global Metals, Mining & Critical Minerals Conference. To help break down the challenges, I sat down with Tara Berrie, Senior Group Manager (Battery Metals, Recycling, Components & ESG) for Rivian, Andrew Miller, Chief Operating Officer for Benchmark Mineral Intelligence, and Joe Lowry, President of Global Lithium.
Significant volumes of metals and critical minerals are needed to help economies shift away from hydrocarbons, though none are as correlated to the electric vehicle (EV) market as lithium. The global annual passenger EV sales growth rate dropped to around 30 percent in 2023 from roughly 60 percent in 2022 and is expected to slow further in 2024, according to BloombergNEF.1
Lithium prices
Slowing annual sales growth in EVs and macroeconomic uncertainty have contributed to a price decline in lithium, but that is expected to change later this year. As Rivian’s Tara Berrie pointed out, inventory levels are currently very low, explaining that lithium is entering “a perfect environment for it to see a very pronounced V-shaped recovery, but it depends on what the catalyst is for that recovery.”
Timing aside, Global Lithium’s Joe Lowry expects a faster rebound than the previous price cycle. “People are overestimating the amount of supply or new supply that will come into the industry,” he noted.
Among the challenges with forecasting the lithium market are limited visibility in all parts of the lithium battery supply chain, the need for higher quality data, and a reliable industry benchmark. The industry needs a better way to link what’s happening in EV demand with lithium supply to get a better read on the market, said Miller. “If you can tie those two together, then market intelligence can be pretty good,” he explained. “But our supply chain is quickly evolving, and it makes it very challenging for anyone operating in this industry to have complete clarity.”
Changes in the supply chain
The supply chain changes Miller referred to are happening midstream, where the raw material is being refined rather than EV manufacturers.
According to Berrie, there needs to be more collaboration between the miners and the OEMs, even when there is not a direct contractual relationship. “Miners need to be equipped with the information around what is happening with demand so that they can de-risk their investments, because the middlemen don’t have great insight,” she explained.
Miller agrees with Berrie’s assessment that more flexibility is needed in the supply chain. “It’s very interesting to see where the cathode and battery producers actually position themselves along that supply chain,” he said. “If you really want to open yourself up to different pools of material, then you’re going to need to control some element of that refining process.”
And Miller argues midstream companies may be better positioned to do some of the refining and put the material to use, although he is careful to note that there will still be value created outside of those midstream players. “There needs to be some interaction and integration with the midstream that is for the good of the industry to have that happen,” he noted.
As part of that process, Lowry would like to see more transparency around the makeup of batteries and what the cathode of the future will be. “We’re moving into an industry where there’s so many applications for these batteries that there won’t be one size fits all,” he said. “The quicker we can get an appreciation and understanding of what the chemistry mix will be, then we can more effectively deploy capital.”
The future of lithium
Between the uneven stockpiles and demand for lithium, and the shifts occurring within the supply chain, the panel expects to see volatility in this market for some time.
The U.S. Inflation Reduction Act of 2022, while intended to be a boost for industries tied to the energy transition, may further complicate matters. As the panel pointed out, the planned gigafactories may create more supply issues as those factories ramp up.
“You’re going to have a significant volume of rejected materials that will need to be recycled. The impact is two-fold – a delay in lithium getting into useable battery cells and losses during the recycling process,” said Lowry, referring to the experience from many existing gigafactories in the first few months of their operations. While the market models may show an oversupply, Lowry warned inefficiencies in the gigafactory buildout could result in a meaningful shortage of the critical metals.
The path toward electrification was never going to be a smooth one, but any pullback on EV production from automakers will only be temporary, said Miller. There is still a sense of urgency to get EVs to market. “This is an opportune time,” he said, “for a lot of those companies to start making some more strategic investments along the supply chain.”
Understanding the Current Dynamic for Lithium
Analyste, Recherche sur les actions - Engrais et produits chimiques
M. Jackson est analyste principal au sein du service de recherche sur les actions de BMO Marchés des capitaux, où il couvre les secteurs des engr…
M. Jackson est analyste principal au sein du service de recherche sur les actions de BMO Marchés des capitaux, où il couvre les secteurs des engr…
VOIR LE PROFIL COMPLET- Temps de lecture
- Écouter Arrêter
- Agrandir | Réduire le texte
Le contenu de cet article sera accessible en français à une date ultérieure. Restez à l’affût!
The demands of the energy transition and supply realities will likely support lithium markets this year, but greater supply chain efficiencies will be needed over the long term.
These themes were in focus during the “Lithium Shock Talk” panel at the BMO Capital Markets 33rd Global Metals, Mining & Critical Minerals Conference. To help break down the challenges, I sat down with Tara Berrie, Senior Group Manager (Battery Metals, Recycling, Components & ESG) for Rivian, Andrew Miller, Chief Operating Officer for Benchmark Mineral Intelligence, and Joe Lowry, President of Global Lithium.
Significant volumes of metals and critical minerals are needed to help economies shift away from hydrocarbons, though none are as correlated to the electric vehicle (EV) market as lithium. The global annual passenger EV sales growth rate dropped to around 30 percent in 2023 from roughly 60 percent in 2022 and is expected to slow further in 2024, according to BloombergNEF.1
Lithium prices
Slowing annual sales growth in EVs and macroeconomic uncertainty have contributed to a price decline in lithium, but that is expected to change later this year. As Rivian’s Tara Berrie pointed out, inventory levels are currently very low, explaining that lithium is entering “a perfect environment for it to see a very pronounced V-shaped recovery, but it depends on what the catalyst is for that recovery.”
Timing aside, Global Lithium’s Joe Lowry expects a faster rebound than the previous price cycle. “People are overestimating the amount of supply or new supply that will come into the industry,” he noted.
Among the challenges with forecasting the lithium market are limited visibility in all parts of the lithium battery supply chain, the need for higher quality data, and a reliable industry benchmark. The industry needs a better way to link what’s happening in EV demand with lithium supply to get a better read on the market, said Miller. “If you can tie those two together, then market intelligence can be pretty good,” he explained. “But our supply chain is quickly evolving, and it makes it very challenging for anyone operating in this industry to have complete clarity.”
Changes in the supply chain
The supply chain changes Miller referred to are happening midstream, where the raw material is being refined rather than EV manufacturers.
According to Berrie, there needs to be more collaboration between the miners and the OEMs, even when there is not a direct contractual relationship. “Miners need to be equipped with the information around what is happening with demand so that they can de-risk their investments, because the middlemen don’t have great insight,” she explained.
Miller agrees with Berrie’s assessment that more flexibility is needed in the supply chain. “It’s very interesting to see where the cathode and battery producers actually position themselves along that supply chain,” he said. “If you really want to open yourself up to different pools of material, then you’re going to need to control some element of that refining process.”
And Miller argues midstream companies may be better positioned to do some of the refining and put the material to use, although he is careful to note that there will still be value created outside of those midstream players. “There needs to be some interaction and integration with the midstream that is for the good of the industry to have that happen,” he noted.
As part of that process, Lowry would like to see more transparency around the makeup of batteries and what the cathode of the future will be. “We’re moving into an industry where there’s so many applications for these batteries that there won’t be one size fits all,” he said. “The quicker we can get an appreciation and understanding of what the chemistry mix will be, then we can more effectively deploy capital.”
The future of lithium
Between the uneven stockpiles and demand for lithium, and the shifts occurring within the supply chain, the panel expects to see volatility in this market for some time.
The U.S. Inflation Reduction Act of 2022, while intended to be a boost for industries tied to the energy transition, may further complicate matters. As the panel pointed out, the planned gigafactories may create more supply issues as those factories ramp up.
“You’re going to have a significant volume of rejected materials that will need to be recycled. The impact is two-fold – a delay in lithium getting into useable battery cells and losses during the recycling process,” said Lowry, referring to the experience from many existing gigafactories in the first few months of their operations. While the market models may show an oversupply, Lowry warned inefficiencies in the gigafactory buildout could result in a meaningful shortage of the critical metals.
The path toward electrification was never going to be a smooth one, but any pullback on EV production from automakers will only be temporary, said Miller. There is still a sense of urgency to get EVs to market. “This is an opportune time,” he said, “for a lot of those companies to start making some more strategic investments along the supply chain.”
33e conférence sur les mines, les métaux et les minéraux essentiels de BMO Marchés des capitaux
PARTIE 1
Une participation record des investisseurs est attendue à la 33e conférence mondiale de BMO sur les mines, les métaux et les minéraux essentiels, qui se tiendra du 25 au 28 février 2024
16 février 2024
La plus grande conférence mondiale sur les mines et métaux regroupe près de 1 500 leaders du secteur r…
PARTIE 2
Notre plus grande conférence mondiale sur les mines, les métaux et les minéraux essentiels
Alan Tannenbaum 23 février 2024
BMO Marchés des capitaux tiendra sa 33e conférence mondiale sur les mines, les métaux et les minéraux essentiels la …
PARTIE 3
Faits saillants de notre 33e conférence mondiale sur les mines, métaux et minéraux critiques
Alan Tannenbaum 04 mars 2024
Fin février, nous avons eu le privilège d’organiser notre 33e conférence mondiale sur les mines, métaux e…
PARTIE 4
Les hauts dirigeants ont des perspectives positives pour le secteur des métaux et des mines
04 mars 2024
Lors de notre 33e Conférence mondiale annuelle sur les mines, métaux et minéraux essentiels, nous avons demandé…
PARTIE 5
Moyennant certaines modifications, l’industrie minière pourrait jouer un rôle plus important dans la lutte contre les changements climatiques. R. Friedland, Ivanhoe Mines
04 mars 2024
L’industrie minière pourrait jouer un rôle plus important dans la lutte contre les changements climatiques, mais elle de…
PARTIE 6
Jigar Shah au sujet du financement de la transition énergétique
Rahim Bapoo 04 mars 2024
Lors de notre 33e conférence sur les mines, les métaux et les minéraux essentiels, Rahim Bapoo avec Jigar Shah, direct…
PARTIE 7
L’or devrait briller dans l’incertitude : le World Gold Council à la conférence de BMO
Colin Hamilton 04 mars 2024
Alors que 2024 devrait être une autre année exceptionnellement incertaine d’un point de vue macroéconomique et g&…
PARTIE 9
ESG Remains Top of Mind for Mining Companies and Their Investors
Doug A. Morrow 04 mars 2024
Disponible en anglais seulement The mining industry remains focused on sustainable business practices, even as investment flows into funds dedic…
PARTIE 10
Le rôle de l’exploitation minière responsable dans la transition vers les énergies propres : entretien avec Rohitesh Dhawan, chef de la direction de l’ICMM
Colin Hamilton 20 février 2024
La transition énergétique a transformé le secteur minier. À l’approche de la 33e Conférence m…
Conférence
fév. 23 - 26, 2025 | Hollywood, Florida
CourrielAutre contenu intéressant
Voici notre boursière du Imperial College de 2024 : Sandra Alarcón Escobar
Pour que le Canada devienne un chef de file du secteur de l’exploitation minière, le gouvernement doit collaborer avec l’industrie
Moyennant certaines modifications, l’industrie minière pourrait jouer un rôle plus important dans la lutte contre les changements climatiques. R. Friedland, Ivanhoe Mines
Les hauts dirigeants ont des perspectives positives pour le secteur des métaux et des mines
L’or devrait briller dans l’incertitude : le World Gold Council à la conférence de BMO
Faits saillants de notre 33e conférence mondiale sur les mines, métaux et minéraux critiques
Notre plus grande conférence mondiale sur les mines, les métaux et les minéraux essentiels
Le rôle de l’exploitation minière responsable dans la transition vers les énergies propres : entretien avec Rohitesh Dhawan, chef de la direction de l’ICMM
Une participation record des investisseurs est attendue à la 33e conférence mondiale de BMO sur les mines, les métaux et les minéraux essentiels, qui se tiendra du 25 au 28 février 2024
Mobiliser les investissements en minéraux critiques pour la transition énergétique
Programme Action-Éducation : Pleins feux sur le boursier de l'Imperial College London
La confiance est la denrée la plus précieuse : Message de l’ICMM à la Conférence mondiale sur les mines, métaux et minéraux critiques de BMO
Les crédits carbone ne se valent pas tous : Conférence sur les mines, métaux et minéraux critiques de BMO
Les légendes du roc réfléchissent aux réussites et aux échecs de l’industrie minière lors de la Conférence mondiale sur les mines, métaux et minéraux critiques
Exploration des avantages de l’extraction de minéraux critiques en Amérique du Nord dans le cadre de la Conférence mondiale sur les mines, métaux et minéraux critiques
Explorer les risques et les possibilités associés aux notations ESG dans le secteur minier
La transition énergétique nécessitera la collaboration entre les minières et les utilisateurs finaux
BMO Experts at our 32nd Global Metals, Mining & Critical Minerals Conference
Le magazine Global Finance désigne BMO comme la meilleure banque d'investissement au monde dans le secteur des métaux et des mines en 2023.
ESG Trends in the Base Metal and Diversified Mining Industries: BMO Equity Research Report
Programme Action-Éducation : Une boursière motivée partage son histoire
Les prix des métaux encore loin d’une nouvelle normalité : Table ronde de BMO sur les mines
The Market Transition from COVID-19 has Begun: Belski to BMO Metals and Mining Conference
BMO Marché des capitaux tiendra sa 31e conférence mondiale sur le secteur des mines et des métaux
Opinion: Canada and the U.S. have a shared interest in securing self-sufficiency in critical minerals
Programme Action-Éducation: Faire une différence, un boursier à la fois
Conversation avec Ian Bremmer : La pandémie et le paysage géopolitique en évolution
La 30e conférence mondiale annuelle sur le secteur des mines et des métaux de BMO est en cours
BMO tiendra sa 30e conférence mondiale annuelle sur le secteur des mines et des métaux