Lithium Supply & Markets Conference 2019 Round-Up
See the complete compilation of our coverage from the 2019 Lithium Supply & Markets Conference in Santiago, Chile.
This year’s Lithium Supply & Markets Conference in Santiago, Chile had plenty of presentations, panel discussions and experts willing to share their knowledge with an eager audience.
The Investing News Network (INN) kept busy at the event, which ran from June 10 to 12, engaging with companies, attending panel discussions and, of course, interviewing industry experts.
For everything you need to know on investing in the lithium space, here is INN’s full recap of the 2019 Lithium Supply & Markets Conference.
If you missed the Lithium Supply & Markets Conference, don’t worry — we’ve put together an overview of what happened at the event.
Lithium prices and the LME lithium contract
Tianqi Lithium (SZSE:002466) President Vivian Wu said lithium demand is solid and the industry is taking the time to adapt to new sustainable growth.
Speaking about the top theme this year, Chris Berry of House Mountain Partners pointed to concerns about pricing.
“Are we at the bottom with respect to lithium? That’s really the name of the game right now,” he said. “The generalist investors believe in the electric vehicle (EV) theme, but until they get some clarity on when pricing levels out, everyone is on the sidelines.”
Despite growing demand from the EV space, lithium prices have been struggling and investor sentiment has seen a downturn. Addressing those issues, Daniela Desormeaux of SignumBOX said she sees today’s lower prices as a rebalancing of the market.
The London Metal Exchange (LME) spent 18 months looking for a partner for what will become the first lithium futures contract. The move is expected to bring more transparency to lithium prices, which have been under pressure in the past several months.
INN talked to experts about the LME’s efforts to launch a lithium contract to bring price transparenxcy to the sector.
According to William Adams, head of base metals and battery research at Fastmarkets, the recent deal between Fastmarkets and the LME to provide a reference price for a new lithium contract will help smooth the flow of lithium down the supply chain.
Lithium market and investments
Earlier this year, the lithium space saw diversified company Wesfarmers (ASX:WES,OTC Pink:WFAFF) make a AU$776 million takeover offer for Australian lithium developer Kidman Resources (ASX:KDR,OTC Pink:KDDRF), with many investors wondering if this acquisition trend will continue.
“I think we will see more of (those deals) going forward,” Joe Lowry of Global Lithium said. “I think it was great because we need another big player in the market.”
Much more investment is going to be needed in the lithium sector in order for a projected surge in demand for batteries to be met, according to Andrew Miller, who is the head of price assessment at Benchmark Mineral Intelligence.
“The industry is at a point now to meet the demand growth of 2022, 2023, (but) significant amounts of capital need to start going into the market in the next six to 18 months, really, so I think that’s a real challenge for the rest of the world,” he said.
For Senior Analyst at Benchmark Mineral Intelligence Jose Hofer, even though the market might experience some oversupply in the short term, it will start to tighten in the next three years as it becomes harder for supply to keep up with increasing demand.
“In the next seven years, we will see demand reach at least 1 million tonnes of lithium carbonate equivalent,” he said. “That is a huge amount of material that needs to be mined, that needs to be processed and converted to chemicals in a secure and stable way.”