SQM Optimistic on Lithium; Lithium Stocks Firm on the Australia Securities Exchange

  • Oct 22, 2019 AEDT
  • Team Kalkine
SQM Optimistic on Lithium; Lithium Stocks Firm on the Australia Securities Exchange

Lithium prices are now steady in the global market, which is now allowing lithium producers and downstream processor a breather.

Many lithium producers have been under pressure in the past few years post a strong drop in lithium prices; however, the halt in the lithium bloodbath is now brining some respite to the ASX lithium stocks.

Lithium Market Outlook

Despite, a strong fall in the lithium prices, the lithium miners and “lithium-bulls” have supported the projections for lithium, which is anticipated to witness a double-digit growth over the rise in demand for EVs and energy storage devices.

To Know More, Do Read: Why Are Market Players Clinching to the EV and Lithium Forecast?

The global lithium chemical behemoth- SQM anticipates that the global vehicles sales would underpin a compounded annual growth rate (or CAGR) of 1 per cent from 2019-20, with China’s vehicle sales contributing a CAGR of 0.5 per cent during the same period.

On the other hand, the global electric vehicle sales are anticipated by the Chile-based lithium chemical major to witness a CAGR of 25.5 per cent, and China’s EV sales are anticipated to grow at a CAGR of 22.5 per cent during the period from 2019-2025.

Global commercial xEV sales are projected by SQM to grow at a CAGR of 21.0 per cent during the period 2019 to 2025.

SQM’s Estimates(Source: SQM’s Estimates)

SQM also estimates lithium hydroxide demand to surpass the lithium carbonate in terms of market share by 2024-2027.

On the supply side, the company anticipates the majority of new supply from mineral resources in 2025, with Australia commanding the largest portion of the supply chain.

Also Read: Chile And SQM Leap To Regain The Market Share Posses Headwinds For Australian Lithium Miners Ahead

The company also believes that the significant increase in near-term supply is positive for the industry over the long-run.

Lithium Stocks Operational Momentum

The stability in the lithium prices are now somewhat supporting the ASX lithium stocks, and the lithium producers are again gaining operational momentum.

To Know More, Do Read: Lithium Stocks Sparkling; Is the lithium Downfall Coming To An End?

Altura Mining Limited (ASX: AJM) recently increased its spodumene production and secured higher shipment for the September 2019 quarter, while Pilbara Minerals Limited (ASX: PLS) is awaiting shareholders’ approval to strengthen its Chinese relations.

Apart from AJM and PLS, now other ASX lithium stocks are also gaining operational momentum.

ASX-Listed Lithium Stocks
Lepidico Ltd (ASX: LPD)

LPD is an ASX-listed lithium chemical explorer, producer and developer, which owns the proprietary metallurgical process that produces lithium chemicals from non-conventional lithium sources such as mica, lepidolite, etc.

The two proprietary processes of the company include:

  • L-Max® - which produces low-cost lithium carbonate.
  • LOH Max ™ - which produces low-cost lithium hydroxide.

The company recently produced a high specification sample of caesium-rubidium formate brine from Pilot Plant potassium circuit liquor with a specific gravity of 2.3, which usually meet the criteria of oil and gas industry.

Lepidolite naturally hosts caesium and rubidium, which was processed by the company through the L-Max® technology to produce an alum-residue or a brine liquor.

The company collected around 100 litres of rubidium-caesium brine during the Pilot Plant Campaign 1, which was later concentrated via using a proprietary process to produce intermediate crystallisation products and a brine containing rubidium and caesium sulphates- which was later converted into formate to meet the key criteria for oil and gas industry application.

Apart from such development, LPD has a scheduled revised Mineral Resource estimate for the Karibib Lithium Project in Namibia for completion in November 2019. The company intends to upgrade the Resource to predominantly Measured and Indicated categories post the completion of an infill drill programme recently.

The company recently produced highest specification lithium carbonate of 99.95 per cent purity through its proprietary L-Max® processing technology against the normal battery-grade of 99.5 per cent, which typically contains deleterious element impurity levels below required levels for most benchmark specifications.

LPD also plans to replicate the same standard production of lithium hydroxide via its processing technology- LOH Max ™ and started a test-work programme for the same.

The company sourced key consumables and is constructing a LOH-Max ™ circuit for the batch production of crude lithium hydroxide, which would allow refining to a high purity product during November 2019 and assays result in December 2019.

The share price of the company recovered slightly in the market, and the stock rose from the level of $0.016 (Day’s low on 10 October 2019) to the presently trade at $0.019 (Closing price on 22 October 2019), which underpinned a growth of over 18.70 per cent.

Lithium Australia NL (ASX: LIT)

LIT is an ASX-listed lithium chemicals developer with an innovative extraction process to convert all lithium silicates into lithium-based chemicals for the lithium-ion batteries. The business portfolio of the company also contains recycling of used batteries and e-waste.

LIT recently extended its stake in Envirostream Australia Pty Ltd by further putting $100,000, which took the equity of the company in Envirostream Australia Pty Ltd to 23.9 per cent. The increased stake in the Envirostream Australia Pty Ltd inches up the company’s exposure to the process of collecting and separating spent lithium-ion batteries.

The company has successfully recovered metals from separated batteries on a laboratory scale and re-used the recovered lithium to regenerate cathode materials to further manufacture coin-cell lithium-ion batteries.

Envirostream Australia Pty Ltd is the only company in Australia with the integrated capacity to accumulate, sort, and shred the components of the lithium-ion batteries, and the existing infrastructure of the Envirostream Australia Pty Ltd is a pivotal element in addressing the surmounting spent batteries waste.

LIT closed at $0.045 on 22 October 2019, a drop of over 2% as compared to its previous closing price.

Apart from that, there are many other lithium stocks on the Australian Securities Exchange, which are recovering over the stabilised lithium prices.

To conclude, lithium prices are stable in the global market, and the market is eyeing the halt in the downfall; however, the supply chain still remains strong.

The market participants and industry operators are still clinching to the lithium forecast, and the stoppage in the lithium prices downfall is now supporting the lithium miners and lithium chemicals producers in Australia.


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