Is the wild ride over? Outlook brightens for lithium as EV sales surge

“We have seen a bit of a pullback in the realised pricing for this quarter, and some of that will flow through into next quarter,” Henderson said. “That being said, the pricing is still very strong. Looking back [there has been a] 300 per cent year-on-year increase in terms of realised price, so there are still very solid margins to be made in this market.”

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Henderson expected prices to level or soften further in the June quarter, with a turnaround likely in the later half of this year. Despite the current slowdown, EV sales in China were experiencing 27 per cent year-on-year growth, and global EV growth remained strong at about 25 per cent year-on-year, he said.

Analysts at Macquarie Bank hold an “outperform” rating against 19 lithium and rare earth miners. They said in a note to clients this week that while spot prices for lithium source material spodumene were largely unchanged, prices were up at one of the sector’s leading indicators, the Wuxi futures.

China battery grade prices have rebounded. “We believe market sentiment could continue improving in May, supported by potentially strong consumption data,” Macquarie said.

Vickerson said EVs were the big driver of lithium demand and would be for decades. The boom was encouraging consolidation and takeovers. “In the merger and acquisition space we haven’t seen the resolution of what will happen to Liontown. Pilbara Minerals and Allkem are also speculated as takeover targets,” he said.

NYSE-listed Albemarle lobbed a $2.50 a share offer for Liontown in late March, a bid the miner’s board turned down alongside two previous offers from Albermarle, of $2.20 and $2.35, it had already rejected.

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