Lithium stocks shine as Chinese futures move higher
\nSyrah inks graphite supply deal with Korea\u2019s Posco
\nCentaurus looks to ride nickel cycle by shifting from sulphate to concentrate production<\/p>\n
Environmental crackdowns on Chinese lithium miners are seeing traders in the Middle Kingdom revert bearish bets on the battery metal to positive ones, the most-traded lithium carbonate contract in Guangzhou rising 7.5% yesterday to hit its highest level since December 11.<\/p>\n
Fetching around US$15,600\/t yesterday before pulling back to a 3.5% gain, the contract is up 15% on its closing price a week and a half ago, according to Reuters.<\/p>\n
Chinese price agencies including Asian Metal and the Shanghai Metals Market have reported slight price lifts in recent days for battery grade lithium chemicals. At the same time Fastmarkets, the most quoted Western price agency along with Benchmark Mineral Intelligence and Platts, kept prices stable saying there was low demand and limited liquidity in the lithium spot market.<\/p>\n
It\u2019s shown how sharply sentiment can shift battery metals stocks.<\/p>\n
Pilbara Minerals (ASX:PLS)<\/a> rose 2.5% to $4.30. The $13 billion miner is up a staggering 15% in the past week even though prices for its primary product \u2014 spodumene concentrate \u2014 remain subdued.<\/p>\n IGO (ASX:IGO) <\/a>and Arcadium (ASX:LTM)<\/a> are also higher, the latter by over 8.5%.<\/p>\n Smaller producers, developers and explorers including Liontown Resources (ASX:LTR), Galan Lithium (ASX:GLN)<\/a>, Piedmont (ASX:PLL)<\/a> and Global Lithium (ASX:GL1) <\/a>were also higher, some by almost 10% as the tide lifted all boats.<\/p>\n Except MinRes (ASX:MIN)<\/a> that is, Chris Ellison\u2019s lith\/gas\/iron ore\/services conglomerate circling around breakeven but itself up around 14% in the past month.<\/p>\n Even other sold off battery metals sectors were getting in on the action.<\/p>\n \u00a0<\/p>\n For years graphite miner Syrah Resources (ASX:SYR)<\/a> has been a case of unfulfilled potential, with protracted weakness in the market for the battery metal pushing the stock down as hopes it can become a major supplier of anode material to the west pull it up.<\/p>\n Already planning to become a major supplier of active anode material to Elon Musk\u2019s EV giant Tesla from from its Vidalia plant in Louisiana, the company has inked another deal demonstrating the desire of the world\u2019s biggest battery makers outside China to divorce themselves from its supply chain.<\/p>\n China mines around 65% of the world\u2019s natural graphite, but under current rates will still boast more than 90% of the anode market until at least 2035.<\/a><\/p>\n And its ability to flex its muscles in both natural and synthetic graphite production have made it difficult for non-Chinese miners to enter the game with confidence.<\/p>\n Prices for the flake graphite grade most associated with EV batteries are sitting at US$524\/t according to Fastmarkets, down from over US$800\/t a couple years back.<\/p>\n But China lit a fire under other graphite jurisdictions in October last year when it announced restrictions on exports of battery-related products in the latest step of a cold trade war with the US and its allies.<\/p>\n That has major producers outside China harried to secure external sources of supply.<\/p>\n One of those, South Korea\u2019s POSCO, just took that leap in a binding offtake deal with Syrah.<\/p>\n POSCO\u2019s battery metals subsidiary \u2014 Posco Future M \u2014 wants to ramp up its natural graphite AAM production capacity from 74,000tpa last year to 154,000tpa in 2026 and 182,000tpa in 2030 and is reliant on purified spherical graphite from China.<\/p>\n From the start of its supply deal, due to be actioned at some point before the end of next year, Posco will take 2000t per month (24,000tpa) of concentrate from Syrah\u2019s Balama mine in Mozambique, and between 2000-5000tpm from the second year on at Posco\u2019s election.<\/p>\n Syrah has concentrate supply deals already with US listed Graphex Group and Westwater Resources.<\/p>\n From the start of next year US battery and carmakers will be unable to receive an IRA credit if any step in the production of graphite AAM used in their end product is made by a so-called \u2018Foreign Entity of Concern\u2019.<\/p>\n \u00a0<\/p>\n <\/span>\u00a0<\/p>\n \u00a0<\/p>\n Syrah was up over 10% this morn. On the flipside, nickel developer Centaurus Metals (ASX:CTM)<\/a> was down more than 11% after announcing major changes to its DFS plans for its Jaguar mine in Brazil.<\/p>\n Previously planning to head all the way to nickel sulphate, the chemical derived from nickel sulphide used in EV batteries, instead it will only take its product to a concentrate in the initial stages of its mine life.<\/p>\n The aim is to bring both capex and opex costs down in the face of a surplus of nickel heading into the battery market from Indonesia, which has killed premiums for nickel sulphate and halved nickel prices over the past 18 months.<\/p>\n Centaurus says the decision to defer its downstream component wasn \u2018not taken lightly\u2019, fingering the ongoing weakness in the nickel market and softer nickel sulphate pricing against inflationary pressure for the call.<\/p>\n The DFS is now due by the end of June on a project which will take the mine\u2019s output through to a conventional nickel concentrate.<\/p>\n \u201cThe changes we have seen in the nickel space in recent months cannot be underestimated,\u201d CTM managing director Darren Gordon said. <\/p>\n \u201cWhile we think nickel prices have overshot on the downside and could rebound much quicker than some market forecasts suggest with supply growth now slowing significantly, we also want to be prudent and preserve maximum value and optionality for our shareholders while delivering an attractive, lower capital cost development route at Jaguar which demonstrates the quality of the project throughout the commodity price cycle.<\/p>\n \u201cA lower CAPEX concentrate project, with lower technical risk and a lower cost of capital in the current market, delivers a better outcome for our shareholders. When we see the exceptional work being done by Ero Copper on its 4Mtpa copper concentrator at Tucum\u00e3, just 40km from Jaguar, we have a lot of confidence in what we should be able to deliver from a similar-sized concentrator at Jaguar.<\/p>\n \u201cWe remain convinced that Jaguar, which hosts Resources of nearly one million tonnes of contained nickel, is one of the top-3 nickel sulphide development projects globally, which we anticipate will become an increasingly important source of low carbon nickel supply, particularly for the Western EV battery industry.\u201d<\/p>\n A number of mines in Australia have shut, curtailed or flagged their potential mothballing in recent weeks, notably BHP\u2019s (ASX:BHP)<\/a> 80,000tpa Nickel West business, with some players proposing the Federal Government introduce tax credits on downstream refining to encourage investment by battery metals miners.<\/p>\n There have also been calls from both some miners and government for the recognition of a \u2018green premium\u2019 for western automakers to acknowledge a distinction between \u2018clean\u2019 Australian nickel and \u2018dirty\u2019 Indonesian products.<\/p>\n But ASX-listed Nickel Industries (ASX:NIC)<\/a>, which produced over 130,000t of nickel metal from its projects in Indonesia last year, said OEMs were more concerned about cost and claimed an HPAL project it will construct in the South East Asian country will be at the lowest carbon intensity of any project worldwide.<\/p>\n \u00a0<\/p>\n <\/span>\u00a0 The post Ground Breakers: Investors charge up their batteries as lithium futures send critical minerals on a tear<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"Cue Syrah, Syrah<\/h2>\n
Syrah Resources (ASX:SYR) share price today<\/h2>\n\n
Centaurus aims to cut costs from Brazil nickel mine<\/h2>\n
Centaurus Metals (ASX:CTM) share price today<\/h2>\n\n
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