Battery metal prices down sharply - Weak demand in EV sector hampers industry
This has been a tough year in the battery metal business. Lithium, nickel and cobalt prices fell sharply in 2023 and have continued to decline through 2024. A sector that was once racing to build new supply has closed mines and postponed projects as low prices make it difficult to break even. of costs.
The road to an electric future has proven to be much more difficult than expected with demand from the important electric vehicle sector falling short of expectations.
This is also a story of massive oversupply with lots of new capacity brought in at just the wrong time. And it will be supply discipline, or the lack of it, that will determine whether there is a price recovery in 2025, as the global EV market is still in the process of expanding.
November was another record month with 1.8 million units sold, according to consultancy Rho Motion. Global sales growth during the first 11 months was 25% higher than in 2023.
But the positive headlines mask two unwelcome truths about the battery metals sector. China is still the main driver of the electric car revolution, with Western markets scrambling to catch up. While Chinese sales set a new monthly record in November, those in the United States and Canada rose just 10% year-on-year in November and those in Europe were lower.
Western consumers still need incentives to switch from the internal combustion engine to the electric motor. German sales of new energy vehicles have fallen this year after subsidies were suddenly removed at the end of 2023.
US subsidies could be scrapped next year if Donald Trump makes good on his green car threat. Another key factor is related to many buyers of these cars, especially in the Chinese market, who are choosing hybrid versions instead of fully electric cars. These models require less metal than fully battery-powered vehicles.
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