November 2024 Update on Battery Raw Materials Market

Battery raw materials market update November 2024

The battery raw materials market is currently experiencing notable disruptions that warrant close attention from stakeholders across the globe. As electric vehicles (EVs) gain popularity, understanding the factors influencing the prices and availability of key materials is crucial for effective decision-making. Fastmarkets provides a comprehensive overview of the current landscape in lithium, cobalt, nickel, manganese, graphite, and battery recycling, highlighting shifts in production, market sentiment, and demand trends that could define the future of this evolving sector.

—

## Lithium: A Stabilizing Market amid Overproduction Concerns

### Overview of the Current Situation

The lithium-ion battery supply chain is grappling with a significant glut of supply, particularly outside China. While the sentiment within China remained relatively stable for a time, recent market dynamics have taken a bearish turn. This shift in outlook may catalyze China to implement strategies aimed at alleviating the oversupply crisis.

### Regulatory Considerations

Echoing strategies from the copper sector, the China Nonferrous Metals Industry Association advocates for regulatory measures to curb excess smelting capacity. Similar interventions in the lithium market would be crucial to stabilize prices and ensure sustainable growth in battery raw materials.

### Transitional Price Movements

Amid these challenges, lithium and spodumene prices have experienced a slight rebound following Pilbara Minerals’ decision to place its Ngungaju plant into care and maintenance. This move is expected to reduce spodumene output by 100,000 tonnes in FY2025, translating to roughly 12,000 tonnes of lithium carbonate equivalent (LCE). However, analysts warn that this reduction alone may not suffice to address the anticipated surplus of 90,000 tonnes LCE projected for the following year.

—

## Cobalt: Navigating the Oversupply Dilemma

### Production Trends

The cobalt market is on track for another turbulent year, with the latest data revealing record production levels from the world’s largest cobalt suppliers. The third quarter of 2024 witnessed substantial output increases, largely motivated by rising copper prices that support mining activities.

### Market Forecasts

Analysts predict that cobalt sulfate will enter a phase of oversupply by 2025 unless there is a significant uptick in demand. Without this increase, pressure on prices, which are already at an eight-year low, is expected to mount further.

—

## Nickel: Disappointment Following Stimulus Announcements

### Price Fluctuations

October saw a notable 8.7% decline in LME nickel prices after a temporary surge to $17,900 per tonne. This volatility was exacerbated by a lack of concrete details in China’s recently announced stimulus package, leading to market disillusionment and subsequent sell-offs.

### Excess Supply Challenges

With an estimated surplus of 94,000 tonnes anticipated in the nickel market for 2024, producers must navigate oversupply dynamics to stabilize prices going forward.

—

## Manganese: Following Market Trends

### Price Adjustments

Manganese prices have mirrored the downward trajectory seen in other NCM material markets. As demand remains tepid, manganese sulfate and manganese ore prices have seen a decline, affecting overall market sentiment.

—

## Graphite: A Critical Juncture for Non-Chinese Producers

### Supply and Demand Dynamics

Natural graphite miners face an uphill battle as ongoing weak demand has resulted in substantial supply cuts. In the first three quarters of 2024, production outside China decreased by 45% year-on-year, posing significant challenges for these producers.

### Price Stability Amidst Declining Demand

Despite fluctuations in green petroleum coke prices, flake graphite prices have remained stable at approximately $450 per tonne, just above historical lows. Producers are under considerable pressure, relying heavily on inventories as demand remains insufficient, particularly in key markets like Europe and North America.

—

## Battery Recycling: A Landscape of Challenges

### Short-Term Pressures

Battery recyclers are feeling the squeeze as low metal prices collide with an oversupply of nickel, cobalt, and lithium. This situation complicates the recycling landscape and prompts a reevaluation of operational timelines, particularly as end-of-life battery supply remains scarce.

### Emerging Markets

India is emerging as a rising star in the lithium-ion battery recycling sector, leveraging its expertise in precious metal extraction to capitalize on its substantial e-waste. This could change the balance of recycling capabilities globally.

—

## Battery Raw Material Demand: Regional Disparities in Growth

### EV Market Dynamics

China’s electric vehicle market has set records, achieving the sale of 1.1 million plug-in EVs in September 2024. Contrastingly, the US and European markets are experiencing slower growth, albeit with signs of resilience.

### Future Expectations

As the global demand landscape shifts, analysts suggest that the Chinese EV market will continue to be a key driver, while upcoming regulations in Europe and increased political stability in the US may bolster future sales.

—

These evolving dynamics in the battery raw materials market present both challenges and opportunities for stakeholders. As the landscape continues to change, it is imperative for investors, producers, and industry observers to remain vigilant and adaptive to ensure strategic decision-making and sustained growth in this critical sector.

Source link