Each week our High Voltage column wraps all the news driving ASX battery metals stocks with exposure to lithium, cobalt, graphite, manganese and vanadium.
INDUSTRY FOCUS
Lithium-ion isn’t just the battery tech of choice down here on Earth.
At the International Space Station, astronauts are in the process of replacing the old nickel-hydrogen batteries with newer, lighter more powerful lithium-ion batteries.
On the EV front, Ford and GM will spend $US900m and $US300m respectively to manufacture EVs in the US state of Michigan, and Tesla says customers shouldn’t bother with an annual service. Bonus.
“Tesla engineers continuously review maintenance recommendations to optimise the performance, reliability, durability, safety and resell value of your Tesla,” the company says.
“Unlike gasoline cars, Tesla cars require no traditional oil changes, fuel filters, spark plug replacements or emission checks. As electric cars, even brake pad replacements are rare because regenerative braking returns energy to the battery, significantly reducing wear on brakes.”
Nickel: stocks are falling, and prices are rising
The words “dire” and “critical levels” were used to sum up the increasing shortage of nickel at this week’s Lithium & Battery Metals Conference in Perth.
Wood Mackenzie, although more conservative than others with its estimates, reckons the nickel market is going to need the equivalent of 12 “Ambatovy” mines by 2030.
That amounts to 480,000 tonnes of much-needed nickel supply by 2030.
Nickel isn’t included in our basket of battery metals stocks just yet, but that may need to change very soon.
For the battery sector, the demand for nickel is currently less than 5 per cent but growing up to 35 per cent by 2040, said Angela Durrant, principal analyst metals research at Wood Mackenzie.
“Our projection at this stage is that by 2040, we are looking at about a 1.7-million-tonne requirement to meet our demand projections,” she says.
“So that’s stainless, that’s into batteries, that is basically into everything and that is really the shortfall we are looking at because there really is nothing of huge significance in the development pipeline.”
Wood Mackenzie predicts prices will head back up to over $US15,400 before rising even further to potentially as much as nearly $US21,000 a tonne by 2025.
“At this stage we are in sustained undersupply, stocks are falling, and prices are rising,” Ms Durrant said.
“So we are looking at a relatively good price outlook for the next couple of years.”
SMALL CAP SPOTLIGHT
Of the companies on our list, 82 lost ground, 59 were ahead and 50 were steady this week.
Not bad right? But for those longer term investors, battery stocks have been abysmal performers over the past 12 months. Check this out:
Ouch.
This week’s big winner was gold and vanadium play Coziron Resources (ASX:CZR), which jumped 57 per cent.
The micro-cap explorer is flying by the seat of its pants right now. Last week, directors tipped in $125,000 to keep the company afloat until the market can be tapped for extra cash.
The new money comes six months after mining identity Mark Creasy agreed to lend them $1m, of which just $63,000 was left at the end of December.
Austria-based European Lithium (ASX:EUR) is part of a syndicate applying to participate in a €1 billion ($1.6 billion) battery production funding programme launched by the German government.
Investors loved this, sending the stock up 48 per cent for the week.
Below-freezing weather is a problem for lithium-ion battery performance.
Last month a study by the American Automobile Association found that freezing temperatures decrease the vehicle’s driving range and fuel economy compared to normal temperatures.
Basically, below-freezing weather is a problem for lithium-ion battery performance.
But aspiring miner/advanced materials tech company Talga Resources (ASX:TLG) may have a solution; the company says it has produced lithium-ion batteries which have shown 100% capacity and 100% cycle efficiency at freezing conditions .
