Battery Metals Lose Luster as Surge in Supply Outpaces Demand (Bloomberg News – November 6, 2023)

In the fast-moving world of battery metals, 2022 already feels like a bygone era. Back then, prices were soaring, automakers were fretting about long-term shortages and Elon Musk was describing lithium costs as “insane.”

A year-and-half on from the Tesla Inc. CEO’s comments, the market dynamics for metals crucial to the energy transition have flipped. Lithium has tumbled almost 70% so far this year, while nickel has plummeted around 40%. Cobalt too has dropped.

This trio of electric vehicle battery ingredients is now among the worst-performing in the commodity universe — laid low by slowing sales growth for electric vehicles as well as supply increases coming out of China, Indonesia and the Democratic Republic of the Congo. The turnaround in fortunes is a reminder that the path to cleaner fuels is unlikely to be a smooth one.

“There’s certainly enough supply of all at present,” said Colin Hamilton, managing director for commodities research at BMO Capital Markets Ltd. Prices for the battery metals “were too high to be sustainable” once output expanded more quickly than expected, he said.

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