Renewables MMI: Battery Metal Markets Hold Sideways Trend

The October Renewables MMI (Monthly MetalMiner Index) dropped yet again, but by less than in previous months. All in all, prices fell by 3.28%. The demand for battery metals due to the growing EV market largely kept the index afloat. Still recovering from August’s steep drop, Cobalt traded sideways between September 1 and October 1, then fell by a modest 2.03%.

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Cobalt Prices on a Roller Coaster Ride

With the demand for EV batteries rising steadily, battery manufacturers are on the hunt for more and more resources. In the US, cobalt mining is ramping up for the first time in decades. In Idaho, for instance, a new mine began upping production to help meet demand for this crucial lithium-ion battery material.

The new mine helps shed some light on the heavy the demand for cobalt. However, it also demonstrates the possibility that demand might outgrow the current global supply. The article goes on to state that nearly a third of all supply mined goes into automobile construction.

However, cobalt prices experienced a noticeable downturn during August. Since then, it has continued to trade sideways. Fortunately, more and more cobalt manufacturers are coming online. And while experts anticipate that demand will rise in the years to come, competition between manufacturers and sources could grow along with it. More suppliers means less opportunity to make a profit.

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Increasing Opportunity in Lithium Manufacturing

Another metal essential to EV battery production is lithium. In fact, Forbes noted that Albemarle, a specialty chemicals company, has increased its stock prices by nearly 21% in the past year thanks to lithium, which accounts for most of its revenue. Meanwhile, the demand for lithium continues to explode. But will supply be able to meet the demand?

For Australia, the spike in lithium demand is a good sign. Currently, the nation is the world’s largest producer of lithium. Experts also predict that the Australian market will grow to almost $13.8 billion between 2022-2023. This makes the country an attractive sourcing option for EV battery producers. In fact, in a recent lithium auction, an Australian miner managed to snag its highest-ever winning bid.

Right now, plenty of money remains the lithium market for EV’s and electronics. However, like cobalt, the demand for lithium could soon exceed supply. To add insult to injury, energy shortages were not kind to metal manufacturing over the past 3-4 months, and the situation continues to worsen as winter approaches. Ultimately, this means less mining and less manufacturing. Right now, the entire industry is merely hoping that supply will last and manufacturing will somehow weather the energy shortage…

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Grain-Oriented Electrical Steel MMI

The GOES/Grain-Oriented Electrical Steel MMI (Monthly MetalMiner Index) continued its sideways trend, rising a slight 2.4% between September 1 and October 1.

The electrical steel marketing currently faces a hurricane-sized issue: rebuilding and restoring power after Hurricane Ian. Currently, Florida’s Lee Country, one of the areas hardest hit by Hurricane Ian, still has over 80,000 power outages.

The Category 4 storm came at an unfortunate time. Supply chain issues in the electrical steel market have resulted in a shortage of spare transformers. More specifically, a shortage of distribution transformers continues to make grid restoration especially difficult. These types of transformers are necessary to take power from high-voltage lines and convert it to a low-enough level for use in homes. That said, it will also take time to clear damage and debris away from roadways so that electrical trucks can travel to affected areas.

Many electrical companies keep a “storm shock” supply on hand. This ensures that electrical companies and grids have enough spare poles, transformers, GOES, and other necessities on hand in case a disaster like Hurricane Ian occurs. However, supply chain shortages placed a massive strain on many companies’ “storm shock” supply. And even with sufficient supplies on hand, no company could ever properly prepare for a storm of such magnitude.

Renewable MMI: Biggest Price Moves

• GOES (grain-oriented electrical steel) traded sideways and currently sits at $4,149 per metric ton.
• Chinese cobalt traded sideways, falling a slight 2.03% and currently sits at $50,015.83 per metric ton.
• Silicon experienced no price shift whatsoever and still sits at $1,519.42 per metric ton

MetalMiner just released its latest Annual Outlook. The report consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices and a detailed forecast that can be used when sourcing metals for 2023 — including expected average prices, support and resistance levels.