COLUMN-Unexpected bump on the EV road hits battery metals – by Andy Home (Reuters – December 18, 2019)

LONDON, Dec 18 (Reuters) – It’s been a tough year for electric vehicle (EV) metal bulls. The previous speculative heat surrounding any and every material that goes into an EV battery has dissipated over the course of 2019. Two years ago the spot lithium price in China was $26 per kilogram. Today it is assessed by Fastmarkets at below $8.

Cobalt, a key input for lithium-ion battery chemistry, has experienced a similar boom and bust cycle, the price of standard grade metal sliding from over $44 per lb in the second quarter of 2018 to a current $15.75.

Nickel has fared better but only thanks to strength in its traditional end-use sector, stainless steel, rather than any pull from the battery sector. Both lithium and cobalt are living with the consequences of previous price exuberance in the form of a supply surge that has swamped processing capacity and left an overhang of stock.

The impact has been accentuated by an unexpected slowdown in demand from the EV sector in China, where sales have fallen for five months and are expected to record a loss for this year.

China accounts for just over half of global EV sales in 2018, according to the Edison Electric Institute. Global sales of EVs this year through to October have risen 13%, compared with 64% in 2018.

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