EV momentum building, metals upgraded
8th December 2017
Resources Rising Stars
Increased demand for electric vehicles has led UBS analysts to upgrade their forecasts for battery raw materials, with graphite and nickel the big winners, reports MiningNews.
Analysts have lifted 2025 estimates for passenger EV sales to 16.5 million units, from 14.2 million, reflecting more positive consumer attitudes, growing confidence in China’s ability to meet targets, and higher than expected 2017 sales.
It follows the second UBS Evidence Lab survey of around 10,000 consumers in the six largest car markets.
UBS predicts that by 2025, one in every six cars sold globally will be electric with one in three estimated in Europe.
“In turn this drives stronger battery raw material demand affecting most prominently lithium, nickel and graphite,” UBS said.
“It’s not all one-way upgrade traffic, though – we have for instance included a more aggressive decline in lithium intensity (kg LCE/KWh) as the shift to more nickel-rich NMC cathodes reduces the weight of materials per KWh of capacity. Still, lithium demand is expected to lift almost five-fold by 2025e.”
While lithium carbonate prices (cost and freight, North Asia) were left unchanged (rising from US$17,938 per tonne this year to $20,250/t next year before dropping to $11,625/t in 2021), graphite and nickel prices received a boost.
Graphite prices are expected to average $1000/t next year, up from the previous forecast of $938/t, with slight increases over the following years to peak at $1050/t in 2021.
UBS left 2017/18 nickel price forecasts, of $5 per pound and $6lb respectively, unchanged but lifted the 2020 estimate to $7.80/lb, from $7.50/lb, and the 2021 outlook to $7.3/lb from $7/lb.
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