Published on August 26th, 2020 |
by Zachary Shahan
August 26th, 2020 by Zachary Shahan
CleanTechnica has been digging into lithium and nickel like we never did before. Every revelation or learning session opens up several more questions. This week, I will again be talking with the boys at RK Equity about both of these metals, and I’m going to open up the webinar to CleanTechnica subscribers for listening in live and submitting questions for us to consider discussing.
The conversation will be happening on Thursday at 9:00 am ET/6:00 am PT (sorry, Californians)/3:00 pm Amsterdam time. I will send out an invite on Wednesday at 10:00 pm ET to CleanTechnica supporters.
A handful of topics I am interested in exploring come from RK Equity’s latest Lithium Market Update as well as a chat RK Equity’s Rodney Hooper had on the EV Stock Channel about nickel.
As a teaser, here are three quotes from the Lithium Market Update that I found particularly interesting and worth probing further:
- “If Tesla sells 900,000 EVs averaging 70 kWh (adjusted upward for the Cybertruck) and two thousand Semi’s in 2021, after adjusting for China short-range LFP M3 sales, Tesla batteries will need approximately 45–50KT of battery qualified hydroxide. Compared to the total global demand of ~65KT in 2019 and 72KT in 2020, the reality of Tesla potentially crowding out other OEMs is apparent. We advise our clients to watch future offtake agreements with the three main hydroxide suppliers (Albemarle, Ganfeng and Livent) very closely. Once their entire existing capacity is spoken for, OEMs will be reliant on promised future expansions and “tier 2” producers—fertile ground for a rally in prices.”
- “The rise of OEM and battery maker joint ventures continues. This was always a logical step as tier 1 cell shortages have already been a bottleneck for OEMs. Major cell makers such as LG Chem have gone a step further and back integrated into cathode production. With a claimed US$125bn of cell orders to 2025 (~1,100 GWh), LG Chem’s raw material needs are substantial. Its hydroxide demands are further increased with its shift to NMC721 at its Polish cell plant – aiming at 70 GWh output in 2023. Offsetting LG’s lithium offtake agreements against their claimed order book point towards an unavoidable shortfall. Unlike its major competitor CATL (Yibin Tianyi), LG Chem has no upstream chemical processing exposure.”
- “RK Equity believes the South Korean cell makers (given their highly ambitions but mostly unhedged growth plans) and their downstream OEM customers are carrying the largest lithium chemical supply risks. With their huge reliance on Chinese imports (80%+) and no localized hydroxide conversion capacity, when will the South Korean cell makers provide financial support for ex-China projects? Will it be too little too late?”
I also recommend watching the recent EV Stock Channel interview with Rodney on the topic of nickel:
Naturally, as background, I highly recommend these three previous pieces and related podcasts:
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