🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Australian lithium miners break out of doldrums as EV demand booms

Published 29/01/2021, 02:06 pm
© Reuters.

Jan 29 (Reuters) - Beleaguered Australian lithium miners showed the first signs of optimism in nearly three years this week, boosted by a recovery in electric vehicle (EV) demand led by China's coronavirus response, company quarterly updates showed.

Record sales and an influx of customer inquiries suggest that the downtrodden Australian sector that accounts for around half of the world's lithium supply may finally be emerging from its extended funk.

Producers are now watching for market signals to restart production shuttered when prices were low, they said.

Pilbara Minerals PLS.AX and Galaxy Resources GXY.AX on Thursday reported record shipments for the three months ended on Dec. 31 because of high demand and cited an uplift in lithium chemicals pricing in China in December benefiting sales. said the trend has continued into 2021, adding that it expects spodumene concentrate's prices will rally in the second half as the lithium ore mineral is a key ingredient for EV batteries.

Galaxy said it was sold out of spodumene for the quarter and would wait before agreeing on the pricing for the next three months because it expected prices would continue to climb.

Spodumene prices ticked up this month to $430 per tonne from as low as $380 late last year, having been locked in a one way downtrend from $980 in early 2018. AM-LI2O5CCN-SPO

Investors have been banking on a recovery in demand since China began boosting EV production in the second half of 2020.

Shares in Galaxy and Pilbara have rallied between 20% to 30% this month, recovering partly from last year's lows.

China's auto industry rebounded swiftly in the later half of last year from the COVID-19 downturn, while EV sales in Europe rose to meet new emissions targets, prompting battery suppliers to expand supply and source more lithium-related raw materials.

Global lithium supply and demand at the end of last year was nearly even, according to data from Benchmark Mineral Intelligence, a turnaround from a deep demand slump in the first-half of 2020 because of the coronavirus pandemic. prices may open the way for supply that had been shuttered because of low prices to come back.

Pilbara and Galaxy's peer Mineral Resources Mina said on Friday it was monitoring market conditions before resuming spodumene concentrate production at its joint venture with Albermarle Corp which has been shuttered for over a year. is also considering the best path to restart the operations of Altura Mining Ltd, which it acquired last year, and expects the capacity to provide the "first major step-up" in spodumene concentrate production.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.