Low Prices Spur Battery Supply Chain Strategic Moves, As Buyers Rejoice – Battery Storage Optimism Is Surging!

Monthly Update – Critical Minerals – Daily Chemical Reactions

Low Prices Spur Battery Supply Chain Strategic Moves, As Buyers Rejoice – Battery Storage Optimism Is Surging!

Key Findings

• General Thoughts: The C-MACC Clean Energy Mineral Index modestly declined in August following a sharp decline in July to reflect 11% lower levels from the YTD high in May – we take a cautious view of the remainder of 2024.
• Critical Mineral Supply: We discuss the YTD weakness in lithium prices, concerns about the duration of the current oversupplied critical mineral setting, and why we think price upside risk is limited in most markets in 4Q24/1H25.
• Clean Energy Components, Batteries & Recycling: Ganfeng Lithium expands from lithium downstream into battery production, integrating within these oversupplied markets, which may or may not lift its returns relative to peers.
• Critical Mineral Macro Demand: We discuss surging battery storage demand in the US (and globally), as many view it as essential to the success of many renewable energy projects, such as solar, amid rising firm power demand.

Exhibit 1: The C-MACC Clean Energy Mineral Index fell ~0.5% in August, down ~3% YTD after a ~53% decline in 2023.

Source: Bloomberg, C-MACC Analysis, September 2024

See PDF below for all charts, tables and diagrams