NEWS
MINERALS   Auto  

Australian lithium miners submerged by low prices

Having raced to ramp up lithium production over the past five years to exploit surging prices, Australian producers are now scrambling to cut supplies as prices plummet on falling demand in the world’s top electric vehicle market.

Miners say they see little respite from the difficult market conditions through year-end due to lower demand for the battery component after Beijing altered its subsidies to electric vehicle makers and a rise in global trade tensions.

The latest round of quarterly reports last week showed a pattern of lower sales as battery producers wound back demand, while the sales that were made came at lower prices.

“If there is no change in market sentiment in regard to the trade war, it’s hard to see a big recovery in China’s car market”

Helen Lau, analyst at Argonaut Securities

Alita Resources called in adminstrators last week after a failed restructure attempt, Pilbara Minerals cut its third-quarter sales forecast and Galaxy Resources’ first-half sales halved from a year ago.

“The sentiment is very bad. If there is no change in market sentiment in regard to the trade war, it’s hard to see a big recovery in China’s car market,” said analyst Helen Lau of Argonaut Securities.

“So on the supply side, it is very, very difficult. There must be some consolidation there going forward among lithium miners.”

Australia accounts for about half of the world’s lithium from hard rock lithium concentrate, called spodumene, which is shipped mainly to China for processing.

China’s biggest lithium producer, Ganfeng Lithium Co, a large buyer of spodumene, posted a 59% plunge in first-half profit last week, and said it expected prices of Australian hard rock lithium to fall further.

Shares in Australian miners such as Mineral Resources, Galaxy Resources, Altura Mining, Lithium Australia, and Pilbara are down between 15% and 68% this year compared with a 20% fall in the price of spodumene.

“The outlook in regards to the market remains very soft,” Galaxy Resources chief executive Simon Hay told an earnings call last week, pointing to rising stockpiles.

Converters of hard rock lithium into battery chemicals in China were holding around four months’ worth of stocks, or double usual levels, he said.

This has slowed sales from overseas suppliers. Galaxy sold 44,630 tonnes in the first half of 2019, against more than 90,000 tonnes a year earlier, at an average price of $584, down from $940 a year ago.

Pilbara Minerals has lowered its capital expenditure in a bid to cut costs and scaled back new development projects.

Altura Mining was put on a temporary trading halt on Friday after falling as much as 30% over two days, but said it was experiencing strong sales and pointed to the general market weakness.

Further out, however, broker Canaccord said it has cut back its forecasts for annual spodumene concentrate production by around 30% to 2025.

“Challenging concentrate market conditions have driven numerous operators to reassess production plans,” it said.

News No: 6288
Date: 2019/09/03 - 15:39
News Source: MINING.COM

Australian  lithium  price  electric vehicle  Pilbara Mineral 

Comments:

Leave a Comment:

   
   
   
 

Iran’s January oil output at 2.086m bpd: OPEC

Iran produced 2.086 million barrels per day (bpd) of oil in January, a 9,000-bpd decrease from 2.095 million bpd in December 2019, according to OPEC’s latest monthly report published on Wednesday.
 

Chile government approves Bearing Lithium’s EIA

After asking for more time to conduct a thorough review, the Chilean Government’s Central Environmental Committee approved the Environmental Impact Assessment for the Maricunga lithium project.
 

Coronavirus spreading pessimism across oil markets

Fears over the spread of the Coronavirus continue to overshadow the oil market as the number of people sickened by the virus has exceeded 10,000 globally and the death toll in China has passed over 200.
 

China virus outbreak weighs on iron ore prices

The iron ore price outlook has weakened ahead of a major Chinese holiday on fears that a coronavirus strain outbreak could delay the spring restart of construction projects.
 

Iron price gains as China imports leap to over 1 billion tonnes

Benchmark iron ore prices climbed on Tuesday after trade data showed Chinese imports of the steelmaking raw material topped 1 billion tonnes for the third year in a row as Beijing’s efforts to stimulate the economy pays off.
 

Australian Vanadium signs agreement with Chinese steelmaker

Australian Vanadium said on Wednesday it penned a non-binding agreement with a unit of steelmaker HBIS Group Chengsteel that could see the Chinese firm buy vanadium and invest in the Perth-based firm’s flagship project.
Upcoming Events
Publications
 Mines & Metals

Mine & Business Today

 Scrap & Recycling

Ahangan

Our partners