Mike Beck: Lithium – The Perfect Storm with an Unprecedented Demand Profile
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This is the first in a series discussing battery metals with Mike Beck who is very knowledgeable in this sector.
Mike discusses his trip to London where he took in the LME week which is a meeting held by the metals industry. There was quite a buzz around nickel and a recognition that E.V. batteries will require more. The theme throughout the conference was the battery metals and it reminded him of the start of the China-led supercycle. Lithium and cobalt have been well established as an investment theme over the last year with many junior companies are entering the space. Copper is also emerging as a story due to additional demand for use in electric vehicles.
In lithium there is an unprecedented demand driven story combined with supply constraints. Currently, there are 200k tons of demand which is expected to increase to at least 800k by 2025. The market is constrained by long lead times to bring a mine online typically seven years.
Unlike many other metals, lithium has little in the way of price elasticity. Lithium is critical to battery applications nothing else that will substitute. He has never seen such a perfect storm in a metal.
Battery technology is moving toward more nickel and less cobalt. They are concerned about cobalt supply but also the fact that cobalt does not contribute to battery performance. It is used to mitigate thermal inefficiencies. Higher nickel should increase capacity and lower cost.
He sees continued price increases in lithium. It’s a very reactive element. You can’t purchase and store it in a warehouse. It’s is extremely difficult to source lithium right now where future supply will come from is a real head-scratcher. There is no doubt that prices are going much higher.
He discusses how to get a position in the lithium space.