Electric dreams turn into a nightmare for battery metals
LONDON, Dec 20 (Reuters) – It’s been a brutal year to be in the battery metals business.
Prices of lithium, nickel and cobalt collapsed in 2023 and have continued grinding steadily lower over the course of 2024.
A sector that was once racing to build new supply has been closing mines and deferring projects as low prices bite into the cost curve.
The road to an electric future has turned out to be much bumpier than expected with demand from t
This is also a story of massive oversupply with too much new capacity brought online at exactly the wrong time.
And it will be supply discipline, or the lack of it, that will determine whether there will be any price recovery in 2025.
China is still the main driver of the EV revolution with Western markets struggling to build momentum.
While Chinese sales set a new monthly record in November, those in the United States and Canada were up by just 10% year-on-year in November and those in Europe were actually lower.
Western consumers still need an incentive to make the switch from internal combustion engine to electric motor. German new-energy vehicle sales have slumped this year after subsidies were abruptly removed at the end of 2023.
U.S. subsidies could go next year if Donald Trump makes good on his threat to roll back the Biden administration’s EV policy.
The second reality check is that many EV buyers, particularly those in the critical Chinese market, are opting for hybrids or plug-in-hybrids over battery electric vehicles.
These have batteries about a third of the size of those used in pure battery models, meaning a similar-sized reduction in all the metallic cathode inputs.
CHEMISTRY EXPERIMENT
Some offset for lithium demand comes from the rising market share of lithium-iron-phosphate (LFP) batteries, which accounted for two-thirds of all EV sales in China last year, according to the International Energy Agency.
LFP batteries are cheaper than nickel-rich chemistries and Chinese battery-makers have improved their performance to the point that CATL’s latest Shenxing Plus model boasts a single-charge driving range of over 1,000 kilometers.
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Electric dreams turn into a nightmare for battery metals, source
