Among renewables, lithium remains a significant driver for ASX investors and companies, with Rio Tinto exploring this space, unlike BHP.
In 2023, lithium pricing and prospects returned to reality, dropping from $US80,000 a tonne to $US20,000-$US30,000 a year later for carbonate and hydroxide.
2024 is expected to be a year of consolidation, exemplified by the recent deal between Chile’s SQM and Hancock Prospecting to gain control of Azure Minerals and its Andover prospect.
The Liontown situation, where Hancock holds 19.9%, remains unresolved. Albemarle, the $3 a share bidder, exited due to Rinehart’s intervention. Could Albemarle return in 2024 with a joint venture bid?
Chinese lithium hydroxide exports surged by 49% in November, but they could decline due to weak demand, coupled with a 6% drop in Chinese power battery production.
Lithium prices have stabilized, with the focus on Chinese demand for NEVs (New Energy Vehicles) or EVs.
2023 witnessed intense price wars among Chinese producers, leading to a 35% or more increase in NEV sales. However, 2024 is expected to see a slowdown, with growth projected at around 20%.
US analytics firm JL Warren Capital anticipates NEVs to account for around 40% of total sales in 2024, up from 30% in 2023.
Of the 13 major EV manufacturers in China, only Tesla and Li Auto are likely to meet their sales targets this year.
In January-November, China’s NEV sales reached 8.304 million units, up 36.7% YoY, and accounting for 30.8% of total vehicle sales.
In the same period, China’s NEV sales (excluding exports) reached 7.212 million units, a 31.7% YoY increase.
Battery EV sales outpaced PHEVs, with 5.86 million units sold in January-November, compared to 2.439 million PHEVs.
November marked a historic milestone, with over 1 million NEVs sold in a single month, including 702,000 BEVs and 323,000 PHEVs.
Exports surged to 1.092 million units in the first 11 months of the year, with BYD and Tesla leading the way, targeting global markets such as Russia, Southeast Asia, and Africa.
The EU is scrutinizing Chinese exports and state subsidies, potentially impacting major European automakers seeking to boost EV exports from China.
Penalties on Chinese exports may affect major European companies and involve Germany, France, Italy, and not just BYD and Tesla.