Commodities Roundup: Developing European Lithium, Cobalt Supply Chains Under the Microscope

For the buyers and category managers out there, especially those of you deep in the weeds of buying and managing commodities, here’s a quick rundown of news and thoughts from particular commodity markets.

From price movements to policy decisions, our MetalMiner editors scour the landscape for what matters. This week:

Europe Aims to Reduce Dependence on Lithium Imports

MetalMiner’s Stuart Burns delved into the subject of Europe’s dependence on imports of lithium, an important material for electric vehicle batteries.

As Burns writes, Europe consumes about 25% of the world’s lithium but relies on imports from elsewhere, namely Australia, Chile, Argentina and China.

To remedy that, one company is looking to ramp up exploration for potential lithium sources in Europe.

“In Cornwall, Cornish Lithium has partnered with the state-backed Satellite Applications Catapult to use satellite imaging to detect the signatures left by lithium deposits deep underground,” Burns wrote. “Lithium is present in brines deep underground, up to 1 kilometer underground, according to a Telegraph article. Cornwall Cornish Lithium hopes the survey will identify economic deposits, and Innovate UK agrees, investing well over a $1 million in a pilot.”

Copper Recovers

Copper prices picked up some steam in April, MetalMiner’s Irene Martinez Canorea wrote in her Monthly Metals Index (MMI) report.

Overall, the copper narrative is a bullish one.

“The fundamentals also support LME copper prices,” she wrote. “Forecasts suggest copper demand will grow this year, while copper mine supply appears unsecured. Therefore, the balance for demand and supply in 2018 could result in a deficit, as it previously did in 2017.”

LME copper was up 1.5% on May 1 compared with April 1. LME copper rose to $6,785/mt as of May 9.

A Big Month for Aluminum

With Russian sanctions and aluminum tariffs, it has been an important month for aluminum, which has seen some significant price volatility in recent weeks.

In April, however, LME aluminum prices skyrocketed, Martinez Canorea wrote in her Aluminum MMI report this week.

In fact, LME aluminum price rose to a more than seven-year high. Like copper, after a lull earlier this year the aluminum price has picked up steam.

“LME aluminum prices fell slightly at the end of the month,” Martinez Canorea wrote. “However, this movement appears as a price correction from previous highs. LME aluminum prices increased again at the beginning of May, showing a strong uptrend.”

Surging Stainless

Continuing the theme of rising prices, LME nickel prices also went up last month, climbing to $15,700/mt on April 19.

“LME nickel prices remain in a long-term uptrend that started back in June 2017, when LME nickel prices hovered around $8,900/mt,” Martinez Canorea explained. “However, nickel price momentum seems slower now than it was back in 2017.”

Investigating Cobalt Supply Chains

In the world of renewables, the price of cobalt dropped last month, as did neodymium and silicon. As of May 1, prices of Japanese and Korea steel plate were down, while U.S. and Chinese steel plate prices were up month over month.

Automaker Daimler recently announced a pledge improve the transparency of its cobalt supply chains. Concerns about cobalt mining operations in the Democratic Republic of the Congo using child labor have made global headlines, and pressure has mounted on large corporations to clean up their supply chains.

Cobalt is coveted for its use in high-tech applications, including electric-vehicle batteries and smartphones. According to an Amnesty International report last November, Apple is leading the way vis-à-vis responsible cobalt source (albeit doing so with a “low bar”). The report called out Microsoft, Lenovo and Renault for being among the companies showing the least amount of progress with respect to responsible cobalt sourcing.