Close menu




April 11th, 2022 | 19:00 CEST

Lithium explosion: BYD, Standard Lithium, Edison Lithium - Explosives for e-mobility!

  • Lithium
  • Electromobility
Photo credits: pixabay.com

Whether e-mobility, aircraft technology or renewable energies, virtually all high-tech segments seek suitable energy storage. The development driver is climate protection, which will put mobility and energy generation and distribution on a new footing in the future. In order to bring e-mobility to a level of efficiency similar to the most modern diesel technology, on the one hand, significantly more environmentally friendly battery production processes are required, as well as a massive increase in performance. The electric boom is thus creating an incredible pull for battery metals, above all, lithium. With a 500% increase in 24 months, the price of the white metal recently reached a new high. But producers are scarce!

time to read: 4 minutes | Author: André Will-Laudien
ISIN: BYD CO. LTD H YC 1 | CNE100000296 , STANDARD LITHIUM LTD | CA8536061010 , Edison Lithium Corp | CA28103Q1090

Table of contents:


    Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
    "[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG

    Full interview

     

    Lithium becomes a bottleneck factor

    Many powerful batteries are needed against the continuing high global demand for e-cars. As a result, just about every automaker is planning with its own specifications on how to handle battery procurement. BYD, VW, Daimler and Tesla already have their gigafactories or are currently planning them. Lithium is one of the essential raw material components of a battery, along with nickel, cobalt, graphite and copper. However, the available production volumes on the markets are limited. According to Benchmark Mineral Intelligence, the deficit is expected to increase from the current 26,000 tons of lithium carbonate to more than 80,000 tons in 2024. That means prices for the white metal will remain high, and the search for new resources will have to be accelerated.

    Standard lithium - Things could start happening here soon

    The top dogs among the producers are able to satisfy some of the current additional demand by expanding their mining sites and are earning handsomely as a result. Further gaps could be filled in the future by explorer Standard Lithium (SLI), which is still under construction and is implementing a major lithium project in the US state of Arkansas. Significant investment in the plant has been underway since 2021, and production is scheduled to start in 2023/24. The Canadians' flagship project is named "Smackover." Here, brine has been mined in southern Arkansas for over 60 years to extract bromine and other minerals. Standard Lithium, with the help of the German Lanxess Group, is now focusing on lithium. With its direct lithium extraction (DLE) technology, it is currently a global leader.

    After the impressive rally and the subsequent correction, the SLI share still has a 185% price gain on the clock after 12 months, and the capitalization is currently at a high of EUR 1.17 billion. The advance laurels are enormous, as are the reactions to doubts and rumors as recently in some short attacks against the Company. Negative coverage came most recently from Hindenburg Research and sent the share to a temporary low of EUR 4.80. After a successful denial by management, the share price exploded again to just under EUR 8.20. Stifel Research rates the stock as a "Buy" with a price target of CAD 13 or EUR 9.48. Buy only in weakness!

    Edison Lithium - Further progress in Argentina

    The largest lithium deposits on earth are found in South America and Australia. The big producers like Albemarle, Livent, SQM, and Allkem are located here. However, the high-tech industry needs more deposits to counter the shortage of raw materials because lithium remains one of the most important raw materials for the mobility revolution and copper.

    At lithium and cobalt explorer Edison Lithium Corp. (EDDY), there is news about the Salar Antofalla and Salar Pipanaco lithium concessions in Argentina. In November 2021, an environmental impact assessment report was submitted to mining authorities in Catamarca, Argentina, for the prospecting phase of exploration. It involves 24 claims covering an area of approximately 100,000 hectares. The work plan includes topography, mapping, geophysical surveys using TEM methods and sampling. Assay results for claims #29 and #30 indicate the presence of a potential brine zone with a thickness of at least 300 meters. It must now be drilled to determine the grades and qualities.

    Mining Minister Maria Fernanda Avila recently told Fastmarkets in London, "President Alberto Fernández and the provincial governments are clear about their commitment to accelerate the country's lithium resources development. Nathan Rotstein, CEO of EDDY, commented, "Argentina is currently in the spotlight for lithium discovery. We are working quickly and effectively to identify potential lithium resources to capitalize on the growing demand for lithium chemistry in the dynamic EV sector."

    In addition to its investment in Argentina, the Company also owns a historic cobalt project in Ontario, Canada, with gold, nickel, copper, lead, and zinc deposits. EDDY shares are trading at CAD 0.13 in Canada and are also listed in Germany. With a market capitalization of only EUR 11 million, investors can still invest favorably here in the future market of "battery metals".

    BYD - The signs continue to point to expansion

    "Build Your Dreams" (BYD) continues to step on the gas! The sales figures for March prove this! For the first time, the Chinese manufacturer sold more than 100,000 e-vehicles, including plug-in hybrids. That corresponds to almost a fourfold increase compared to the previous year.

    The signs continue to point to expansion. The fifth plant of the Chinese electric car manufacturer will be officially opened on April 15 in the industrial park of Fuzhou. The new factory for vehicles with alternative drives has swallowed up a total investment of almost EUR 2.2 billion. It covers an area of around 2 million square meters, with an annual production of 200,000 vehicles planned. In addition, BYD announced back in December that it would invest EUR 1.2 billion in the construction of a battery project for new energy vehicles in the high-tech zone of Fuzhou. Annual production in 2021 is already impressive, with a 218% increase to over 604,000 e-vehicles.

    The minutes of BYD's latest investor meeting recently revealed that the Company's cumulative order backlog has reached 400,000 vehicles and is increasing sharply every month. The new industrial park in Fuzhou will go some way to alleviating the Company's difficulty in meeting demand. BYD shares immediately made up for the Ukraine shock with a 30% rise but now technically need to rise above EUR 30 to generate medium-term buy signals. Meanwhile, Australian bank Macquarie lowered its price target by 16% to EUR 32.40.


    The increase in the price of fossil raw materials acts as a catalyst for e-mobility. As a result, the lithium market continues to be under intense pressure. BYD and Standard Lithium are well-known big caps in the sector. Edison Lithium is moving forward with its exploration program and is cheap.


    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    Der Autor

    André Will-Laudien

    Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.

    About the author



    Related comments:

    Commented by André Will-Laudien on September 30th, 2022 | 12:36 CEST

    Higher, faster, further: BYD, Infinity Stone, Porsche, Varta - The energy transition stock portfolio is wanted!

    • Mining
    • Gold
    • Electromobility
    • GreenTech

    The words "energy turnaround" are used a lot in public. The majority understand it to mean the use of GreenTech to generate energy while avoiding dangerous climate gases. Unfortunately, the leaks from the Nord Stream 2 pipeline, which is not in operation, are leaking the amount of gas into the atmosphere every day that the state of Denmark consumes in an entire week. This makes us painfully aware of how strongly warlike actions counteract efforts to save the climate. On the stock market, it is important to turn our gaze away from current events and toward a more peaceful future, where good ideas for sustainable change will also be rewarded. Which stocks belong in the portfolio?

    Read

    Commented by Juliane Zielonka on September 29th, 2022 | 10:57 CEST

    Barsele Minerals, K+S, BYD - Sweden as a crisis winner?

    • Mining
    • Gold
    • fertilizer
    • Electromobility

    Due to the explosions in the Baltic Sea pipelines Nord Stream 1 and 2, a switch to other energy sources is inevitable, especially for German industry. Fertilizer producer K+S, based in Kassel, is affected by this. The situation is different with Barsele Minerals. The Canadian company is exploring large gold areas in sunny Sweden and plans to mine up to 3.5 million ounces of the precious metal in the future. Electric car and battery manufacturer BYD, on the other hand, has sufficient resources in its home country of China and is preparing to make the leap into the European market. Find out here which shares are now defying the crisis.

    Read

    Commented by Fabian Lorenz on September 28th, 2022 | 11:22 CEST

    Time for bargain hunters? Plug Power, Varta and Pathfinder Ventures

    • Investments
    • Camping
    • RV
    • Electromobility

    Growth stocks are currently under particular pressure. But this can also create opportunities for bargain hunters. Perhaps in the case of Varta? The share has crashed sharply after a profit warning. Now, the first analyst has upgraded the share from "sell" to "buy". But even his reasoning does not sound like a new growth story. Plug Power also tends to live on the hope of growth. While the new production facility is technically a milestone, it needs more. In contrast, things are going well at Pathfinder Ventures. The still unknown tourism company is profiting from the camping boom in North America, and its valuation is anything but expensive.

    Read