Lithium

Discussion in 'Commodity Futures' started by themickey, Dec 28, 2018.

  1. themickey

    themickey

  2. vanzandt

    vanzandt


    Albemarle Q1 Profit Beats Street
    RTTNews
    May. 8, 2019, 05:10 PM

    (RTTNews) - Albemarle Corp. (ALB) Wednesday reported a first-quarter profit that trumped Wall Street estimates by a penny, driven by a more-than-expected increase in revenues.

    Albemarle's first-quarter net income rose to $133.6 million or $1.26 per share from $131.76 million or $1.18 per share last year.

    Adjusted earnings for the quarter dropped to $1.23 per share from $1.30 per share last year. On average, 16 analysts polled by Thomson Reuters estimate earnings of $1.22 per share for the quarter. Analysts' estimates typically exclude one-time items.

    First-quarter sales rose 6% to $832.1 million from $821.6 million last year. Analysts had a consensus revenue estimate of $817.04 million fort he quarter.

    CEO Luke Kissam said, "Lithium pricing was up year-over-year, while Catalysts and Bromine Specialties performed well, with both benefiting from increases in volume and price. We remain confident in our expectations for the full year, and committed to our long-term strategy that positions us for continued growth."

    Lithium sales dropped 2.1% to $291.9 million due to lower sales volume driven by the impact of a rain event in Chile. Bromine Specialties sales rose 10.4% to $249.1 million, while catalysts sales slipped 3.5% to $251.6 million.

    Looking forward to full year, the company confirmed its adjusted earnings outlook of $6.10 to $6.50 per share and revenues of $3.65 to $3.85 billion. Analysts currently estimate earnings of $6.21 per share and revenues of $3.68 billion for the year.

    ALB closed Wednesday's trading at $72.58, down $3.27 or 4.31%, on the NYSE. The stock, however, gained $2.14 or 2.95% in the after-hours trade.
     
    #42     May 8, 2019
  3. themickey

    themickey

    Might be sitting on the bottom here.
    index.png
     
    #43     May 16, 2019
  4. themickey

    themickey

    Australia, US should form battery mineral alliance, says lithium chief
    May 22, 2019 https://www.afr.com/news/world/nort...l-alliance-says-lithium-chief-20190522-p51pu7

    China sent fresh shivers through US financial markets on Tuesday (Wednesday AEST) after president Xi Jinping visited a Chinese rare earth mining facility.

    The move coincides with growing despair over the lack of progress on a trade deal and was seen as reinforcing China's status as the world's largest producer of materials used to make everything from nuclear reactors to electric motors, screens and smartphones.

    The VanEck Vectors Rare Earth/Strategic Metals ETF surged almost 5 per cent.

    Related to that, The Australian Financial Review reported this week that Lynas Corporation will have support from the US military as it looks to develop rare-earth processing in Texas as a way of encouraging alternatives to China's supply.

    Lithium producers, alongside other critical metals providers, are increasingly calling for government intervention to help them compete against Chinese and other Asian producers, who often have state backing.

    Intervention could include the creation of the kind of tax credits that have been used to spur the renewables energy industry; faster permit-processing; lowering capital costs; R&D support and the provision of critical physical infrastructure, Mr Calaway said.

    At the same time, there was now a concerted push in both the Trump administration and across the congressional aisles towards a dedicated national electric vehicle supply chain policy.

    Mr Trump issued an executive order in late-2017 to secure America's critical materials supply, while bipartisan legislation sponsored by US senators Lisa Murkowski from Alaska and Joe Manchin from West Virginia seeks to help support producers by easing permits.

    Speaking during a visit to Washington this month, Mr Calaway said he was struck by the prospects of a trans-Pacific approach to the issue.

    "There's always been this very important relationship between Australia and the alliance, but I think there's growing recognition that the relationship on these strategic battery materials in the supply chains that are critical to these industries is of critical importance," he said.

    Mr Calaway said countries such as Australia and the US could choose between developing deliberate strategies, or risk becoming "completely dependent on batteries, battery materials, and potentially ultimately the actual cars and other things themselves not being developed by us".

    "You have to make an affirmative stand," Mr Calaway told the AFR. "And I think that the US and Australia are uniquely positioned to work together and to encourage production in those countries and go towards further value-add."

    "It's an idea that is gathering currency, certainly in the United States, and I believe it's also getting currency in Australia."

    The electrification of global transport, led by China's strategic push to reduce its reliance on fossil fuels, means demand for critical materials will surge five-, 10-, or 15-fold rapidly, he said.

    "They have absolutely set their sights on this - and, by the way, not just for economic dominance but also because they recognise that as their society industrialises that the petroleum age isn't going to work for them," he said.

    "This isn't about them trying to take advantage of us. They made a decision that it's in their interests, internally, to make this shift."

    Mr Calaway said the difficulty for China was that it's not well endowed with critical battery-making materials such as lithium, whereas Australia is one of the world's greatest sources.

    "We ought to decide how we want to position our alliance [with the US] to at least create a thoughtful response - not just accept what is," he said.

    Demand for lithium alone will jump no less than 10 times over the next decade.

    While the total value of lithium production is expected to double to $US10 billion ($14.5 billion) a year, Mr Calaway said the steady and secure supply of the material was "the absolute linchpin for hundreds of billions of dollars of investment that will be made, assuming it's there".

    "So it's not an unreasonable issue for governments to say 'we want to make sure about that'."

    Mr Calaway said Ioneer was planning to invest $US550 million on its Rhyolite Ridge project in Nevada, just over 350 kilometres from the Musk's Gigafactory.

    Thanks to Ioneer's project, total US lithium production is expected to explode from 4000 to 5000 tonnes a year now to 20,000 to 22,000 tonnes by 2021, making it one of the most crucial projects for America's future battery production.

    "It's an important project that an Australian public company is developing in near-term production of the critical material in the United States, close to the big US production centre," he said.

    Mr Calaway said he supported the legislative push to encourage US development.

    "We think that you're going to see discussion about not just improving the regulatory environment, but asking the question: "Are there prudent, thoughtful ways to create financial incentives that support those developments in Australia and the United States that are consistent with our way of life."
     
    #44     May 22, 2019
  5. Overnight

    Overnight

    Proof that having a lot of money does not mean one is "smart".

    I am so happy I will be dead before the spawn of these jamokes will have a chance to dilute the genetic intelligence pool any further than we already see.
     
    #45     May 27, 2019
  6. themickey

    themickey

    Lithium M&A heating up despite trade war

    After several months without a significant deal, a lithium exploration company and a lithium producer are the latest investment targets, as demand for the white metal crucial for the manufacture of lithium-ion batteries continues to soar.

    This is in spite of the fact that China, a major player in the lithium sector, is going toe to toe with the United States in a trade war that, as of June 1, subjects critical metals like lithium and rare earths to Chinese import tariffs.

    In this article we take a deep dive into lithium and examine what effects an escalation of the trade war could have on the global lithium market, in particular the United States as it aims to reduce its dependency on foreign lithium suppliers.

    Bacanora Minerals deal

    On May 20 Bacanora Minerals (LSE AIM:BCM) announced that Ganfeng Lithium, China’s second biggest lithium producer (the largest is Tianqi Lithium), will buy close to one third of the company. According to a press release, Ganfeng will pay GBP14.4 million (US$17.7 million), or 25 pence a share, for a 30% stake in Bacanora, which is developing the Sonora claystone lithium deposit in Mexico.

    The cash payment for 56 million BCM shares also gives Ganfeng the option to buy a 22.5% stake in the Sonora project for $9.6 million, nominate a director to sit on Bacanora’s board, and increase the project stake to 50% within six months. In exchange for its investment, Ganfeng will have the right to purchase one half of all lithium produced at Sonora during its first stage of production.

    Alliance Mineral Assets deal

    Then on Monday, Alliance Mineral Assets (A40: AX), an Australian lithium producer, said it has entered into a memorandum of understanding with Jiangxi Special Electric Motor, a major Chinese EV maker.

    According to a press release, the companies plan to form a 50-50 joint venture to produce and sell battery-grade lithium hydroxide within the next six months to a year. The lithium would be sourced from Alliance’s Bald Hill spodumene operation, then shipped to Jiangxe province where the Chinese EV company would convert it to lithium hydroxide, used in EV battery cathodes.

    Alliance notes that one of the agreement’s key benefits is it provides Alliance access to a nearly completed lithium hydroxide circuit in China, rather than having to build a new conversion facility from scratch.

    Trade war escalates

    Of interest to us at Ahead of the Herd, is not only the interest that Chinese companies are taking in lithium projects, but the timing. They are occurring at the same time as China and the US are ratcheting up the rhetoric in the ongoing trade war and putting more on the table by increasing tariffs on each other.

    Could it be that China wants to lock up more lithium supply before lithium prices rise? We know that the lithium market in the long term is likely to be in deficit as troubles ramping up production meet a mounting wall of demand. We also know that China produces roughly two-third of the world’s lithium-ion batteries and controls most of its processing facilities. This give China tremendous clout should it decide to deprive the United States of lithium batteries or raw materials, just as the US is planning a mine-to-EV battery supply chain.

    After several weeks of trade negotiations in Washington failed, the US decided to walk away and raise duties on $200 billion in Chinese products to 25% from 10%. In retaliation, Beijing hit $60 billion worth of US exports to China – raising import tariffs to between 10% and 25% on an extensive list of over 5,000 US products. About half are being tariffed at 25%. Among the mineral and chemical products about to be punished on June 1, are sulfur, graphite, asbestos, borate, feldspar, rare earth metal ore, titanium oxide, lithium carbonate, and metal concentrates including iron ore, manganese, copper, nickel, zinc, titanium, zirconium, vanadium, precious metals and mineral sands.

    It’s also been reported that the US started a formal process Monday to slap tariffs on China’s remaining exports to the United States – likely leading to higher prices for iPhones, toys and sneakers, among the goods affected.

    So far the United States has refrained from ensnaring critical minerals in its net of Chinese goods subject to tariffs, and for good reason; many US companies (and the military) rely on imports of rare earth oxides to make high-tech materials such as electric motors used in EVs, wind turbines and a myriad of defense applications. Disrupting their supply chains would inflict serious harm on them. Same with manganese, necessary for smelting iron ore into steel, and various lithium products plus graphite needed for lithium-ion batteries; for the latter, China is by far the largest producer.

    China feels no such need to hold back on critical metals tariffs. But this trade really only goes one way. Very small volumes of minerals and chemicals on the above list are exported from the United States to China. It’s China that holds the power to disrupt these markets, which in several cases is a major producer.

    In Trade war will hasten bull market for rare earths, we argued that hitting American rare earth metal exports with tariffs is a red herring, in terms of what drives the rare earth market. But the imposition of export restrictions, perhaps aimed directly at the US, would almost certainly, by exponentially higher prices, pump more steam into a rare earth bull market.

    It’s the same thing with lithium; tariffs on US lithium exports are inconsequential. Currently the only US lithium producer is chemicals giant Albemarle. Lithium products from Albemarle’s Silver Peak lithium brine operation in Nevada are sent to its processing plant in North Carolina. This material is then loaded on ships and sent to Asian battery manufacturers, which sell the batteries to automakers.

    We don’t know how much lithium hydroxide Albemarle exports to China from Kings Mountain (the company does not disclose the amount to the USGS in tabulating global production statistics), but we do not think it is significant in global terms. According to Visual Capitalist, Silver Peak only produces 1,000 tonnes per year of lithium hydroxide, within a current lithium market of roughly 280,000 tonnes per annum of lithium carbonate equivalent (LCE), a term that encompasses both lithium hydroxide and carbonate used in EV batteries.

    Rather, the larger weapon in China’s arsenal is the ability to use its size in the EV batteries market to bully US lithium consumers. Remember China produces two-thirds of the world’s lithium-ion batteries and has a lock on most lithium-ion processing facilities.

    Chinese lithium suppliers and battery makers could restrict lithium sales or stop supplying batteries to US companies, or companies that are planning on manufacturing EVs in the US. Other automakers are planning on building EV and EV battery plants in the United States, but with the threat of their battery supplies being cut off, these new factories are also unlikely to proceed.

    Think the China-US trade spat could blow over? It doesn’t look like it. A recent news headline has Chinese President Xi Jinping evoking the iconic Chairman Mao in his quest for world domination.

    “We are here at the starting point of the Long March to remember the time when the Red Army began its journey,” Xi said at a rally in Jiangxi province. “We are now embarking on a new Long March, and we must start all over again!” according to a report from the South China Morning Post.

    While the trade war wasn’t mentioned, the implication was clear – China is not planning to cave in any time soon, noted CNBC.

    China’s lithium domination

    A Tesla executive said recently the company is worried about a shortage of lithium. And while the number of EVs on the roads are expected to multiply in coming years, they can only progress as fast as the lithium-ion batteries that go in them.

    The pendulum is clearly China. Consider that in 2017, China sold 750,000 electric cars, 50% more than in 2016. And that was only 3% of the Chinese vehicle market. By 2025, the Chinese government wants EVs to represent 20% of all cars sold.

    As Quartz notes, in order to maintain its dominance in the lithium market, Chinese manufacturers need a lot of cheap lithium. That explains why its largest lithium miner, Tianqi Lithium, owns 51% of Australia’s Greenbushes spodumene mine – the world’s dominant hard-rock lithium mine. And why China bid for, and got, a 23.7% stake in Chilean state lithium miner SQM, the second largest in the world, for $4.1 billion.

    EV growth continues

    As noted at the top, two Chinese companies this week inked deals to obtain more lithium, thereby further solidifying China’s position at the top of the lithium heap.

    As China’s mark on the lithium market becomes more pronounced, growth in electric vehicles is taking off.

    According to Adamas Intelligence, this past February 75% more lithium carbonate was deployed for batteries in electric and hybrid passenger vehicles compared to February, 2018.

    Europe in particular is becoming more important, due largely to renewable energy initiatives and buyer incentives.

    According to an article in Seeking Alpha, stringent CO2 emissions starting in 2020 “are paving the way for the meteoric rise of electric vehicles.” Germany is looking at doubling subsidies for EVs costing under 30,000 euros and raising subsidies for more expensive electrics. Mercedes Benz wants to make its entire fleet of vehicles carbon neutral by 2039.

    GM has just come out with new “electronic architecture” for the interiors of its EVs and self-driving cars. The new systems are capable of carrying 4.5 terabytes of processing power per hour, five times that of current electronics. The new architecture will be deployed in GM’s first EV, the 2020 Cadillac CT5 sedan.

    According to Bloomberg, EV sales are expected to increase from 1.1% of the total auto market in 2017, by a factor of 10 by 2025, 27x by 2030 and 50x by 2040. JP Morgan meanwhile is forecasting electric cars to be 35% of the global market by 2025 and 48% by 2030.

    A recent article in MINING.com has the world’s largest mining company, BHP, saying that it has raised its forecasts for global adoption and sales of EVs. The diversified miner estimates in 2035 there will be at least 132 million EVs on the road – comprising 7% of the world’s vehicle fleet versus its earlier 5% estimation.

    According to Benchmark Intelligence, the growth of lithium-ion gigafactories to supply batteries to all of those EVs, is expected to blossom from 45 in production currently, to 76 by 2028.

    Need to develop North American lithium supply

    In 2008 the National Research Council saw lithium as potentially becoming a critical mineral due to the expected growth of hybrid vehicle batteries. Two years later the US Department of Energy’s Critical Materials Strategy included lithium as one of 16 key elements.

    Lithium is also among 23 critical metals President Trump has deemed critical to national security; in 2017 Trump signed a bill that would encourage the exploration and development of new US sources of these metals.

    MINING.com noted that according to the USGS, the United States last year imported around half of 48 minerals last year and 100% of 18 minerals – including 100% of rare earths, graphite and indium.

    The publication also quotes Simon Moores, managing director of Benchmark Mineral Intelligence, stating that the US only produces 1% of global lithium supply and 7% of refined lithium chemicals, versus China’s 51%.

    The US government recently introduced bipartisan legislation, led by Republican Senator Lisa Murkowski, to secure local mineral resources including battery metals lithium, graphite, cobalt and nickel.

    The Newswheel reported that the pending bill, called the American Mineral Security Act, “would help boost domestic production of minerals used in making EV batteries” such as GM’s objective of “expanding its battery-production facilities so it can introduce 20 new EV models by 2023.”

    Significantly for the current trade war, the legislation would also exempt automakers from paying tariffs for shipping extracted minerals like lithium carbonate and hydroxide overseas for processing, The Newswheel adds.

    Junior financing breakdown

    The problem is, in order to kickstart exploration for critical minerals, the industry needs more than government support; it requires money.

    Raising cash for exploration in the junior resource market right now is difficult, to put it mildly. According to Oreinc, a Vancouver-based research and advisory firm, Canadian-listed mining companies are raising less money and inking fewer deals.

    As reported by the Financial Post, Oreinc tracked around 1,400 Canadian mining companies between $100 million and $1.5-billion valuations. It found that in 2018, cannabis companies raised $4 billion versus $217 million by mining companies.

    What does this mean for the lithium market? Well, as financings dry up, so does the exploration pipeline. Companies that would normally be out there kicking rocks, sampling, drilling and drumming up shareholders, are in a holding pattern, waiting for the market to come back. In the meantime, the supply of lithium is not growing, especially in North America; shrinking exploration, ergo, flat or depleted supply, plus increasing demand for electrical vehicle batteries, equals higher prices.

    Conclusion:
    The current M&A we are experiencing in the lithium space is interesting for the fact that it’s coming at the same time as the screws are being tightened on both the lithium and rare earths markets – US exports of both are now subjected to Chinese import tariffs.

    However the trade war is really just a smoke screen for what’s actually occurring in lithium – a further locking down of lithium supplies by China – with the two latest examples occurring this week – first, an investment by Ganfeng Lithium into Bacanora Minerals, and second, an offtake agreement between Alliance Mineral Assets and a major Chinese electric vehicle manufacturer.

    If things get uglier on the trade front, there’s nothing stopping China from slapping an embargo of its processed lithium, or lithium-ion batteries, on US lithium consumers, thereby hurting US companies that rely on these products.

    It all points to the need to take steps to end North American dependence on foreign lithium, by exploring for and developing local mines.

    Richard (Rick) Mills
    https://www.fnarena.com/index.php/2019/05/29/lithium-ma-heating-up-despite-trade-war/
     
    #46     Jun 4, 2019
  7. themickey

    themickey

    These Mining Superpowers Supply the World's Lithium. Now They Want to Make Batteries, Too.

    Rather than dig out minerals and see others get rich with them, Chile and Australia want bigger profits keeping production at home.


    Article too long and too many pics, refer link below.

    https://www.bloomberg.com/news/feat...stralia-chile-see-riches-as-ev-battery-makers
    1600x-1.jpg
    A brine lake at SQM’s plant in the Atacama desert, Chile. SQM is one of two miners in Chile allowed to expand production on the condition they will sell some of their output to companies that will domestically develop the material.
     
    #47     Jun 5, 2019
  8. themickey

    themickey

    Went bottom fishing again, bought ORE, Orocobre Lithium, $3.11 ea
    Orocobre is building a substantial Argentine based industrial chemicals company through its portfolio of lithium, potash and boron assets.

    In partnership with Toyota Tsusho Corporation (TTC) and JEMSE, Orocobre has built and is now operating the world’s first commercial, brine-based lithium operation constructed in approximately 20 years, positioning Orocobre as one of the world’s largest and lowest cost lithium chemicals producers.

    Additionally, Orocobre and Toyota Tsusho Corporation will soon begin construction of a 10,000 tpa lithium hydroxide plant in Naraha, Japan. The construction of the Naraha Lithium Hydroxide Plant will further cement Orocobre’s position as a global lithium chemicals producer operating at the bottom quartile of the lithium cost curve. This new hydroxide plant will be the first of its kind in Japan and will provide Orocobre product diversification suitable for different battery technologies and the potential for significant margin growth on our primary lithium carbonate being converted to battery grade lithium hydroxide.
    Orocobre also owns Borax Argentina S.A, a well-established boron chemical and mineral producer with extensive operations and a 50-year production history.
    Orocobre is dual listed on the Australian Securities Exchange (ASX:ORE), the Toronto Stock Exchange (TSX:ORL) and is included in the ASX 200 Index.
    index.png
     
    #48     Jun 20, 2019
  9. themickey

    themickey

    Sold today @ $2.97 for a 5.064% loss over 6 calendar days. The stock lost upward momentum hence the exit. Lithium mkt overall is turning bearish once again.
     
    #49     Jun 25, 2019
  10. themickey

    themickey

    27 June 2019
    Australian lithium exports are growing much slower than expected, and weak demand in China has analysts predicting prices for the battery commodity have further to fall.

    This year was supposed to be the year a "wall'' of new supply crushed lithium prices – but while prices have slumped, export data suggests supply growth has been modest and is not solely to blame.

    Galaxy Resources confirmed this week that its export volumes for the six months to June 30 would be just half that shipped by the company in the first half of last year.

    Galaxy said a schedule delay would ensure a shipment due before Sunday now would depart later in the year. The admission came after the company blamed extremely weak exports in the first three months of 2019 on its customers having high inventory levels.

    The company now looks set to record its weakest half-year export volumes since it restarted Western Australia's Mount Cattlin mine in January 2017.

    Galaxy's admission comes less than two weeks after rival lithium exporter Pilbara Minerals said it was reducing production and sales at its Pilgangoora mine through the Australian winter in response to reduced demand from Asian customers.

    The big New York-listed lithium producers have also underwhelmed on production volumes this year: Albemarle's first-quarter output fell 3 per cent following weather disruptions, while Livent also flagged lower sales because of rain and customers seeking to defer delivery of battery-grade lithium.

    The situation has left small companies such as Alliance Mineral Assets and Altura Mining as the main sources of Australian lithium supply growth this year.

    Commodity intelligence firm Fastmarkets still expects the global surplus of lithium to rise from 28,000 tonnes in 2018 to 68,000 tonnes this year, suggesting the surplus could have been far worse had producers such as Galaxy, Pilbara and Albemarle met export forecasts.

    While rising supply has been a factor in weak lithium prices, weaker than expected lithium demand at several levels of the Chinese electric vehicle supply chain also appears to be a significant factor.

    Pilbara told investors that the Chinese utilities that convert Australia's lithium-rich spodumene concentrate into battery-grade lithium had been slow to construct and commission new conversion capacity, and therefore were not ready to take the volumes they had ordered.

    Those comments were similar to the explanation given last month by Livent, which said battery manufacturers in China were delaying the launch of new battery products, and were therefore demanding less battery-grade lithium.

    Most lithium miners have also pointed to this year's changes to electric vehicle subsidies in China, which appear to have slowed adoption of the such vehicles.
    The combined effect has been a virtual halving of daily market prices for lithium in China.

    UBS does not expect prices for battery commodities to improve soon; the bank expects global car sales to fall 4 per cent this year, and Chinese sales to fall 8 per cent.

    ''Lithium and graphite prices are seen falling further in [the three months to September 30],'' said the UBS analyst team, led by Glyn Lawcock.

    UBS downgraded its 2019 lithium carbonate price forecast by 8 per cent this week, and its 2020 lithium carbonate price forecast by 21 per cent.

    That led to big earnings downgrades for Galaxy and other lithium producers, and UBS said it did not expect Galaxy to turn a profit until 2023.

    Fastmarkets expects a lithium surplus of 146,000 tonnes in 2020, but most pundits expect demand to catch up in the mid-2020s when adoption of electric vehicles picks up.

    The bearish market conditions have attracted short-sellers to the lithium sector, with Orocobre the seventh most shorted stock on the Australian Securities Exchange, Galaxy the eighth and Pilbara Minerals the 12th most shorted.
    https://www.afr.com/business/mining/australia-s-lithium-export-boom-underwhelms-20190627-p521vb
     
    #50     Jun 27, 2019