When Joe Lowry speaks, the lithium world tends to listen. And listen it did to his keynote address on Day 2 of the Future Facing Commodities Conference in Singapore.\u00a0<\/p>\n
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We listened in, too. It was customary uncompromising and astute stuff from the forthright host of The Global Lithium Podcast<\/em>.<\/p>\n And we took note of his most striking observations about the state of play in 2024 for the prominent battery metal. Here then, are some of the key takeaways from Mr Lithium\u2019s speech, tellingly (for a recharging market) titled: The Waiting Game<\/em>.<\/p>\n \u00a0<\/p>\n Let\u2019s start at the bottom. Actually, it\u2019s not just a<\/em> single bottom of the lithium market that Lowry suggests watching out for, it\u2019s \u201cmultiple bottoms\u201d.<\/p>\n What does he mean by that? To wrap the noggin around it we need to understand, he says, that there is no single \u201cspot\u201d lithium price.<\/p>\n \u201cWhen you think about the lithium industry, think a little deeper than what Reuters\u2026 Bloomberg etc tells you the lithium price is,\u201d said Lowry. \u201cIt\u2019s a range out there.<\/p>\n \u201cWhen you talk about the lithium price bottoming, there\u2019s going to be multiple bottoms because there\u2019s multiple prices.\u201d<\/p>\n He\u2019s referring to the fact that generally, \u201cthe China spot lithium price is not the lithium price\u201d.<\/p>\n There are a range of lithium prices. Korea, he notes, is the second biggest market for lithium chemicals in the world. Japan is third. Both these markets didn\u2019t see quite the fall that China\u2019s spot price did (it dipped about 80%) by the end of 2023.\u00a0<\/span><\/p>\n Okay, but has price bottomed?<\/p>\n \u201cI\u2019m not going to say it has for sure,\u201d said the lithium expert, fielding his own question. \u201cBut I think it\u2019s going to happen this year, if it hasn\u2019t already.\u201d<\/p>\n \u00a0<\/p>\n \u201cI\u2019ve never seen the sentiment on lithium this negative,\u201d noted Lowry. \u201cAnd it doesn\u2019t make sense to me.\u201d<\/p>\n Mr Lithium said that with even the commodity at US$15k a tonne\u2026 \u201cthat\u2019s historically a pretty high lithium price. But the narrative here now is\u2026 well, what was $80,000?<\/p>\n \u201cI never thought the lithium price would get to $40,000<\/em>. And I sure never thought it would get to $80k.<\/p>\n \u201cWhen it got to $80k, and peaked out [end of 2022], the lithium-ion battery supply chain was stuffed \u2013 from cathode to cells to packs and what happens in China, when they start to see the price ease and come down\u2026 they stop buying. And they start living off the inventory.<\/p>\n \u201cAnd then we saw the rundown in price. The narrative became \u2018high prices fix high prices\u2026 was it oversupply because high prices fix high prices?\u201d<\/p>\n Lowry believes it was more about the inventory drawdown and destocking than a case of lower-quality lepidolite (over spodumene) flooding the market.<\/p>\n \u00a0<\/p>\n Lowry believes the narrative being pushed around the traps that demand for electric vehicles having cooled is overblown.<\/p>\n \u201cThe growth rate has slowed, but the Western press continues to misjudge the global EV story,\u201d he highlighted in one of his presso slides.<\/p>\n \u201cEVs are gonna do just fine. But you have to be comfortable with that because the lithium industry is now completely tied to batteries.\u201d<\/p>\n What about Chinese EV titan BYD looking to infiltrate the US market and forge further global EV dominance?<\/p>\n \u201cI for one would love to see BYD\u2019s cars sell in the US, because if you really want ubiquitous EV adoption in America\u2026\u00a0 if you let BYD in, people who can\u2019t afford Teslas, could now then afford an EV. They have EVs at every price point, and we just don\u2019t have that.\u201d<\/p>\n The BYD Seagull, by the way, retails for roughly US$9k. And it is pretty highly rated in the city runabout category by car industry experts. There really isn\u2019t a decent EV anywhere near that price point currently on sale in America, or Australia and much of the rest of the world for that matter.<\/p>\n Lowry pointed to this CNEVPOST<\/em> chart, highlighting the fact the trend, despite its \u201csawtooth\u201d action, is going in the right direction.<\/p>\n\n \u201cPeople can just stop worrying about NEV demand,\u201d he added.<\/p>\n \u00a0<\/p>\n \u201cThe great<\/em> thing about the fall in price\u2026 is that we\u2019re not really hearing a lot<\/em> about sodium-ion in energy storage systems<\/a>,\u201d said Lowry.<\/p>\n \u201cBecause if lithium stays below $25,000 a tonne, then sodium ion is pretty much a dog that doesn\u2019t hunt\u2026 and will have a very small niche.\u201d<\/p>\n \u00a0<\/p>\n Aside from that sodium-ion dog quote above, Lowry probs saved his best\/most succinct thoughts for his final slides. Key takeaways on those, were\u2026<\/p>\n \u00a0<\/p>\n Did lower prices fix lower prices?<\/strong><\/p>\n Recent evidence suggest both chemicals and spodumene prices have bottomed. Much of the capacity that drove the 2023 oversupply is currently not economic.<\/p>\n Lower prices also increased demand in the battery sector and limited substitution (sodium ion)<\/p>\n \u00a0<\/p>\n How high will prices go this cycle?\u00a0<\/strong><\/p>\n \u201cMy prediction is global average carbonate pricing moves into the low to mid $20s\/kg by December.\u201d<\/p>\n \u00a0<\/p>\n What else?<\/strong><\/p>\n Lithium is still a very misunderstood market, said Lowry, with banks (like Goldman, like JP Morgan) continuing to try to \u201cforce feed investors the standard commodity narrative\u201d.<\/p>\n Moving ahead, Mr Lithium notes believes that excess in China capacity across the lithium-ion battery supply chain will continue to drive the volatility. And that, while China continues to dominate lithium processing, it remains dependent for raw material.<\/p>\n \u00a0<\/p>\n <\/span><\/p>\n The post Watch out for multiple lithium bottoms, says Joe Lowry. And sodium-ion? It\u2019s \u2018a dog that doesn\u2019t hunt\u2019<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"Keep an eye out for \u2018multiple bottoms\u2019 later this year<\/h2>\n
Negative sentiment \u2018doesn\u2019t make sense\u2019<\/h2>\n
The EV growth narrative is intact<\/h2>\n
How about the sodium-ion threat to lithium?<\/h2>\n
Mr Lithium\u2019s closing thoughts<\/h2>\n