Bleeding Out – Cheap Critical Minerals, Battery Oversupply, Falling EV Prices; Waiting on The Demand-Side Tourniquet!

Monthly Update – Critical Minerals – Daily Chemical Reactions

Bleeding Out – Cheap Critical Minerals, Battery Oversupply, Falling EV Prices; Waiting on The Demand-Side Tourniquet!

Key Findings

• General Thoughts: The C-MACC Clean Energy Mineral Index declined ~6% in July to reflect 11% lower levels from the YTD high in May – recent weakness is resulting in growth capex cuts and hope for tighter markets in 2025/26.
• Critical Mineral Supply:  While positive sentiment toward critical minerals has eroded amid concerns with demand, especially batteries and EVs, keeping pace with supply, which has overreacted to meet longer-term ambitions.
• Clean Energy Components, Batteries & Recycling: We discuss battery overcapacity, notably in China, and the drop in battery prices, which like in many critical minerals, is working to stall many Western battery expansion plans.
• Critical Mineral Macro Demand: The global demand for electric vehicles is rising, but falling short of upstream input-supplier estimates, and low prices favor the durability of China’s globally dominant EV value-chain positions.

Exhibit 1: The C-MACC Clean Energy Mineral Index fell ~6% in July, now down ~2% YTD after a ~53% decline in 2023.

Source: Bloomberg, C-MACC Analysis, August 2024

See PDF below for all charts, tables and diagrams