Summertime Sadness – Cheapening Critical Minerals Beg The Question, Why Is Downstream Demand Not Supporting Markets?

Summertime Sadness – Cheapening Critical Minerals Beg The Question, Why Is Downstream Demand Not Supporting Markets?

Key Findings

General Thoughts: The C-MACC Clean Energy Mineral Index declined ~5.5% in June to now reflect gains of ~4% YTD following a ~53% YoY decline in 2023 – recent weakness is keeping optimism for tighter markets in 2H24 in check.
Critical Mineral Supply: We discuss why part of the downward trend in critical mineral prices is due to the erosion of positive sentiment across its downstream value chains, especially relating to battery and EV market demand.
Clean Energy Components, Batteries & Recycling: We highlight battery overcapacity, most notably in China, which has put downward pressure on battery prices, resulting in some Western battery expansion plans slowing.
Critical Mineral Macro Demand: The global demand for electric vehicles is falling short of most expectations, and stiffening price competition favors China’s dominant supply chain position and challenges Western ambitions.

Exhibit 1: The C-MACC Clean Energy Mineral Index fell ~5.5% in June, now up ~4% YTD after a ~53% decline in 2023.