As we always do, here we take out one day to look at the greatest stories of the last week. The clear winner of this past week was the SQM and Corfo agreement. We covered this extensively already in our post The SQM Deal and The Lithium Market Sell Off. If you haven’t done so already, we also recommend you read the note put out by UBS as well as Canaccord Genuity. Overall, many analysts agreed with our analysis that the Lithium market sell off was overblown and potentially a good buying opportunity for the right producers. We’re already starting to see a slight uptick in producer stocks since the major sell off that took place over the last few days.
Onto the next story, we at The Lithium Spot closely monitor all technology related to the lithium ion battery. After all, the lithium bull market is closely tied to the supply/demand imbalance for the lithium ion battery. Many are looking into what’s known as the solid state battery. This past week, the UK government joined in on the party by backing research into solid state batteries to the tune of 42 million Euro. Also it should be noted that this 42 million Euro investment is the first of a total 246 million Euro planned investment into battery technology by the UK government. As stated in the FT, the purpose is to try to better compete with China who as we all know is clearly investing the most of any country into the greater EV space.
Finally, regarding solid state batteries, it should be noted that they are not close to coming to a store near you. Yet, when it does, many believe that this battery may actually call for an increase in lithium in the battery itself vs. today’s lithium ion battery. If this is true, it would obviously only further add to the overall lithium bull market story. Lastly, also over this past week, it was noted that BMW was looking into the Solid State Battery as well.
Car companies continue to discuss ways in which they are entering the EV marketplace. Two weeks ago, it was Ford that announced a massive $11 billion (USD) investment into the space. Over the last week, it was Ferrari that announced that they are planning “an all electric supercar.”
A new hedge fund (Westbeck Electric Metals Fund) with $250 million (USD) under management will be dedicated to investing in the “Electric Revolution.” 75% of the fund will be focused on investing in companies that explore and produce key EV materials such as lithium, cobalt, nickel, etc. The remaining 25% will be focused on “other aspects of the electric value chain.” For more information, you can read the Bloomberg piece here and a much more in depth view here.
For those who are looking to better understand the broader market forces at work, we recommend that you read Howard Mark’s latest memo which came out today. We read everything which Howard publishes and recommend you do the same.
Finally, ICYMI, our 4Q:17 Value Investing Takeaways piece was recently covered by InvestingNews.com. You can read it on our site here.