Host of The Global Lithium Podcast, Joe Lowry is one of the world’s foremost lithium market experts. Here, he gives Stockhead his takes on the battery metal’s outlook as the industry recharges for 2024.
Dubbed “Mr Lithium” by industry players, Joe Lowry’s nuanced and uncompromising takes on the industry have been developed over more than two decades working across the US, Japan and China and have helped him amassed a following of more than 26,000 people on the platform formerly known as Twitter.
We caught up with the lithium legend just before Christmas, in an effort to learn where he believes the land lies in 2024 for the biggest battery metal narrative of them all.
‘Global EV sales up over 30% in 2023’
Hi Joe. For a few reasons, it was a tough year for many lithium/battery metal stocks. What positives do you take from 2023 for the sector?
“Despite all the rhetoric about an EV slowdown, actual global EVs sales will be up over 30% in 2023. I look at numbers from many sources including Rho Motion who project just under 14 million EVs sold,” Lowry says.
“What happened in 2023 wasn’t a shock. I have been in this business for over three decades – lithium battery supply chain disconnects have happened multiple times.
“In 2022, all facets of the supply chain developed excess inventory, so in effect 2022 wasn’t as great a year as it looked, the price run up was unnecessary, and 2023 was a year of correction. The long term lithium demand story is still intact.”
A realistic bull
How bullish, bearish or flat are you feeling about the global lithium market for 2024? And why?
“I am a realistic rather than rogue bull,” Lowry says.
“In general, the global mainstream press is lazy, doesn’t understand lithium, writes simple narratives and then searches for data points to back up their ill conceived beliefs.”
Are downturns in the market a good way to shake out the crappy bandwagon stocks? And do good stocks almost always survive lean periods?
“Yes and yes – if you are at the low end of the cost curve, all is good.”
Lithium’s supply and demand issue improving?
How do you think the demand and supply dynamics of the global lithium market will evolve in 2024?
“The price drop of 2023 will slow financing for many projects that have marginal economics with prices below $20,000/MT,” Lowry says.
“I expect lithium chemical supply to be close to balanced but as inventories are rebuilt in China, price will begin to rise sometime in 2024.
“The excess in ore and low grade precursors from Africa may remain but gradually be used by converters that blend them into their systems.”
Excellent analysis from @andyleyland1 of @insights_sc. I agree with his broad points. I believe LCEs in all forms are in a modest oversupply but BQ lithium at best will be in relative balance in 2024 but not sufficient to deal with growing demand & restocking. Price is the 2024-? https://t.co/sW8NZzySec
— Joe Lowry (@globallithium) December 26, 2023
Added to that – is the future of the lithium clay industry hinging on the success of Lithium America’s (NYSE:LAC) Thacker Pass project? What impact could Thacker Pass and its smaller peers have on supply?
“Thacker Pass is far and away the top sedimentary project. Bacanora will continue to languish as Mexico’s lithium polices limit investment,” Lowry says.
“Ioneer (ASX:INR) will likely remained mired in permitting problems. Thacker Pass will become the most significant single US supply but will not materially impact the global supply as demand will continue to grow rapidly.”
The bottom – are we there yet?
What else do you think it will take for the spot lithium pricing to turn around in 2024? I know you’ve said in the past that calling this sort of thing is fraught, but do you think the bottom could be in sight?
“Much of Chinese lepidolite is losing money at current spot pricing. Even Chinese companies can’t lose money on a long term basis without subsidy,” Lowry says.
“I believe the bottom happens by the second half of 2024 at the latest.”
An interesting lack of conviction. @Macquarie was very optimistic in their Sept #lithium price projection but just three months later has fallen into group think mode. Look for pricing somewhere in between their “bi-polar” projections to 2028. pic.twitter.com/FVhrythFGg
— Joe Lowry (@globallithium) December 22, 2023
Could fresh innovations change the lithium narrative?
How do you think advancements in lithium extraction and processing tech will impact the market in 2024? Are there any particular innovations that could significantly change the landscape?
“DLE [direct lithium extraction] is coming but not significantly in 2024. Any other improvements won’t make a significant difference,” Lowry says.
Is Gina morphing into #lithium Barbie? You have to love the WA #lithium landscape. Looking forward to 2024. Will $SQM agree that $AZS team colors are pink? pic.twitter.com/F4ESyZeAc3
— Joe Lowry (@globallithium) December 20, 2023
‘Aussie spod will remain the most significant supply’
Given the unique position of Australia in the global lithium market, what is your outlook for ASX-listed lithium stocks in 2024? Are there specific factors or trends within the Aussie market that you think could influence these stocks’ performance?
“ASX investors seemingly have a a higher tolerance for early-stage project risk and in many cases a greater interest in lithium than investors in other markets,” Lowry says.
“I have done very well in ASX stocks including Pilbara Minerals (ASX:PLS) , Azure Minerals (ASX:AZS) and Latin Resources (ASX:LRS).
“Investors will gradually forget the ultra high spodumene prices of 2022 and adjust their expectations. Aussie spod will remain the most significant supply in the near term.”
You mentioned a few top ASX lithium stocks you’ve done well from there. Are there any others you’d care to name that you think could do well in 2024?
“I don’t give investment advice, but if you want to know the stocks I like, have a listen to my podcast.”
Good idea. Cheers, Joe.
You can catch The Global Lithium Podcast, hosted by Joe Lowry > here.
The post Clouds clearing? Lithium price bottom will hit by second half of 2024, believes ‘realistic bull’ Joe Lowry appeared first on Stockhead.
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