Battery Metals Outlook Q1 2023

The Battery Metals Market in 2023
Table of Contents
Lithium Market 2022 Year-End Review 3
Lithium Market Forecast: Top Trends That Will Affect Lithium in 2023 9
Lithium Market Update: Q1 2023 in Review 19
Cobalt Market 2022 Year-End Review 25
Cobalt Market Forecast: Top Trends That Will Affect Cobalt in 2023 30
Cobalt Market Update: Q1 2023 in Review 35
Graphite Market Forecast: Top Trends That Will Affect Graphite in 2023 41
Vanadium Market Forecast: Top Trends That Will Impact Vanadium in 2023 47
Manganese Market Forecast: Top Trends That Will Impact Manganese in 2023 52
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Lithium Market 2022 Year-End Review

What happened to lithium in 2022? Our lithium market update
outlines key developments quarter by quarter.
Pull quotes were provided by Investing News

Network clients Argentina Lithium & Energy
and Alpha Lithium. This article is not paid-for
content.
Lithium prices remained at all-time highs

in 2022 as electric vehicle (EV) demand
jumped and supply tightness increased.
The key raw material used in batteries took center stage this past year, and from
bearish oversupply calls from banks to lithium stocks seeing gains, it was an
eventful 12 month period for the sector.
Read on for an overview of the factors that impacted the lithium market in 2022,
from the main supply and demand dynamics to how analysts thought the metal
performed in each quarter of the year.
Lithium market in Q1: Price rally continues

EV demand has been driving lithium prices higher, and as mentioned, analysts are
optimistic about the market going forward. During Q1 of this year, prices increased
more than 126 percent year-on-year, according to Benchmark Mineral Intelligence
data.
“Following the price rally in the Chinese domestic market in Q4 2021, there was an
expectation that lithium prices would continue to climb in early Q1 on the back of
reports that the market remained exceptionally tight,” Benchmark Mineral
Intelligence Senior Analyst Daisy Jennings-Gray told the Investing News Network
(INN).
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“However, as per every significant price milestone lithium has hit in the last year,
each month brought fresh highs that many didn't think would be achieved so
quickly,” she said at the end of Q1.
Motivated by high lithium prices and the desire to meet the surging demand,
companies shared news about ramp-ups, restarts and expansion plans during the
first three months of the year. “But the quarter definitely painted a clear picture of
the disconnect between lithium supply and downstream demand from the EV
industry,” Jennings-Gray added.
With that in mind, all eyes turned to the year's expected ramp-up and expansion
projects.
“A handful of Australian and Chilean ramp-ups remain the biggest risk to our
forecast,” CRU Group’s Martin Jackson told INN in Q1. “There is enough incentive for
these to exceed expectations and maximize returns.”
Similarly, Benchmark Mineral Intelligence’s Jennings-Gray said the success of these

expansion and restart projects would play a part in the reality of how tight the
market was by the middle of 2022.
“Furthermore, the effect on the spodumene feedstock bottleneck and the price for
which any available spodumene material goes for on the spot market will be a
defining factor in showcasing market sentiment,” she said.
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Lithium market in Q2: Bearish supply calls put pressure on stocks

During Q2, COVID-19 lockdowns in China, particularly Shanghai, gave rise to an
unexpected hit on demand from the EV sector, with a number of vehicle
manufacturing plants shutting down over April.
“Given growing concerns over rising COVID-19 cases in China, combined with
reports that Chinese regulators were looking to prevent prices from climbing so
rapidly, there were some expectations at the beginning of Q2 that lithium prices
might not see the same upward climb experienced in Q1, with this expectation
coming to reality,” Jennings-Gray said.
Speaking with INN at this year’s Fastmarkets Lithium Supply and Raw Materials
conference, William Adams of Fastmarkets said the demand pullback would be
temporary. “What we're seeing is just a pause on the demand side because of the
lockdowns in China,” he said. “And I think it's more that consumer demand has
been constrained rather than falling back.”
As lockdown measures eased, Adams was expecting lithium prices to move higher.
“I don’t think we’ve seen the peak in prices yet,” he told INN at the event, which was
held in Phoenix, Arizona. “We expect to see that towards the end of this year, or
maybe the first quarter next year.”
On the supply side, availability of material from domestic Chinese brine resources
ramped up as expected over late Q2 as warmer weather improved seasonal
evaporation rates, analyst Daisy Jennings-Gray told INN.
During Q2, investment bank Goldman Sachs (NYSE:GS) released a report that
increased investors' worries over potential excess lithium supply; the bank also
predicted a sharp correction in prices by the end of next year.
However, for Benchmark Mineral Intelligence, the lithium market will remain in
structural shortage until 2025. “The lithium market will balance over the next few
years, but it’s unlikely that an unprecedented ramp-up of marginal, unconventional
feedstock will fill the deficit. It is also unlikely that demand will weaken significantly,”
analysts at the firm said in June.
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Similarly, iLi Markets' Daniel Jimenez doesn’t think supply will be able to catch up
with demand at least until 2026 to 2027, mainly because of the difficulty of bringing
greenfield projects into production at full capacity. “Over this period of time, lithium
should be the limiting factor in EV sales,” he said. “Even with demand growing very
strongly, the investments the industry is making today might yield additional
capacity in six to 10 years from now that we are not able to see today.”
Lithium market in Q3: Price momentum continues

In Q3, lithium prices in the Chinese domestic market saw strong upward
momentum, Jennings-Gray said.
“(This was) signaled towards the end of Q2, when COVID-19 restrictions were lifted
in Shanghai at the start of June,” she explained to INN. “With demand picking up
towards the end of the quarter, and ahead of Golden Week holiday, domestic prices
sustained upward momentum throughout the quarter, hitting fresh highs in
September.”
Despite the macroeconomic headwinds, the Chinese domestic market appeared to

be unaffected by the economic downturn, with the EV industry performing well
even though other sectors were experiencing weakness.
“Outside of China, there have been murmurs of weakening demand from

traditional sectors, particularly in Europe and North America, although this had
little downward bearing on pricing as supply remained very tight,” Jennings-Gray
said at the end of Q3.
Looking over to supply, production from the brine projects in China's Qinghai
province was anticipated to wane entering the winter months amid cooling
temperatures cool and slower evaporation rates.
“At the same time, there is limited additional supply expected to come online or
ramp up during the quarter, and with demand expected to continue to grow, it
looks as if supply is set to tighten even further,” Jennings-Gray said.
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Looking forward to prices, Benchmark Mineral Intelligence was expecting little

downside to pricing in Q4 as demand was ready to ramp up; without any extra
supply coming to market, availability of material looked set to be even tighter.
Lithium market in Q4: Demand remains bright

Lithium continued to hold on to high levels throughout Q4, even though prices
started to slip by the end of the year.
“We expected prices to continue to climb in 2022, but not as much as they ended
up doing,” Adams told INN. “That said, having reached a high at 512,500 yuan per
tonne in March, we did not think we had seen the high. We expected prices to rise
further before dipping towards the end of the year.”
Commenting on lithium demand during a panel at this year’s Benchmark Week,

Ashish Patki of Livent (NYSE:LTHM), which operates its lithium business in the Salar
del Hombre Muerto in Argentina, said one of the best ways to bring back what’s
happening in the supply chain and put it in terms of lithium demand is to look at
cathode output.
“China is the center of cathode output … this year's lithium-iron-phosphate output

in China is easily on track to cross 1 million tonnes compared to about 400,000
tonnes last year,” he said. “Nickel-cobalt-manganese 811 in terms of output in China
is in the number two position, and what we are seeing is 100 percent growth
year-over-year as well.”
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Patki’s demand estimate for 2023 is that the industry will need a million tonnes of
lithium carbonate equivalent.
“Again, whether there's supply that will be able to meet that, that's the big
question,” he said. “(Furthermore) many of us in the industry, we tend to
understate, underestimate the brand of applications of lithium-ion batteries.”
For the business development director at Livent, if supply cannot catch up, demand
will be deferred, not destroyed.
“If there is not enough supply available of raw materials, it will just carry over into
the next year,” he said. “It will just keep ballooning even more than anybody would
think.”
For lithium miners trying to develop projects and bring supply on stream, financing
continues to be a big hurdle.
“Funding has happened, but it's not happening still at a rate that anyone needs.
Institutional money is still not as aggressive as it should be,” said Simon Moores of
Benchmark Mineral Intelligence. “And then, if they get the money to take it to the
permitting stage, then permitting is a massive hurdle — it can add 50 percent of the
time onto building your mine.”
The US and Canada are both said to be reviewing the permitting process for new
mines as they continue to push for more domestic and regional supply of key raw
materials, including lithium.
As of December 12, 2022, Benchmark Mineral Intelligence’s lithium index was up

152.4 percent year-to-date, with that number increasing to 182.6 percent on a
year-on-year basis.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in

any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the
accuracy or thoroughness of the information reported in the interviews it
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conducts. The opinions expressed in these interviews do not reflect the

opinions of the Investing News Network and do not constitute investment
advice. All readers are encouraged to perform their own due diligence.
Lithium Market Forecast: Top Trends That

Will Affect Lithium in 2023
Read on to learn what analysts expect for the lithium market in 2023.
Pull quotes were provided by Investing News

Network clients Lake Resources and
International Lithium. This article is not
paid-for content.
Lithium prices soared in 2021 on the

back of rising global electric vehicle (EV)
sales, and in 2022 the battery metal
stayed at historic highs as investors paid more and more attention to
developments in the sector.
Here the Investing News Network (INN) looks at lithium’s 2022 performance, as well
as what analysts see coming for the market in 2023. Read on to learn their thoughts
on supply, demand and prices.
How did lithium perform in 2022?

At the end of 2021, analysts were expecting lithium demand to continue outpacing
supply in the year ahead.
Speaking about the lithium market in 2022, Daisy Jennings-Gray, senior analyst at
Benchmark Mineral Intelligence, said she anticipated a huge hike in prices through
2022, but the scale at which this happened was unprecedented.
“What was particularly surprising compared to 2021 was the steep climb in
feedstock prices, which really indicated the extent of supply tightness in the
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market," she explained to INN. "(It also) highlighted that high lithium prices aren't
just reactionary to sentiment, but a reflection of the raw material disconnect."
In 2022, Williams Adams, head of base and battery metals research at price
reporting agency Fastmarkets, was also expecting prices to continue to rise, but not
as much as they ended up doing.
“That said, having reached a high at 512,500 yuan per tonne in March, we did not
think we had seen the high — we expected prices to rise further before dipping
towards the end of the year,” he said. “In the end, prices climbed to 597,500 yuan in
mid-November and were last at 567,500 yuan, so they are indeed slipping as 2022
draws to a close.”
When looking at how different lithium products performed, lithium carbonate

prices started 2022 at a significant premium to hydroxide, at 70,000 yuan,
according to Fastmarkets data. This difference was driven by strong demand from
lithium-iron-phosphate (LFP) batteries, which use lithium carbonate.
LFP batteries have been on the rise in China and are used for shorter-range,
durable, lower-cost EVs. LFP batteries currently coexist with higher-nickel cathode
types, such as nickel-cobalt-manganese (NCM), which can provide longer-range
travel and higher energy density for consumers with range anxiety. These cathodes
require lithium hydroxide instead of carbonate.
“Demand for NCM was suffering from a combination of stronger demand for LFP in
China and as parts shortages constrained EV production in Europe and the US,
which affected demand,” Adams said.
In China, carbonate is still at a premium to hydroxide, albeit only around 5,000

yuan.
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Graph showing price difference for lithium hydroxide over carbonate.
Graph via Fastmarkets.
Outside of China, however, hydroxide prices have been notably higher than
carbonate prices on the spot market, according to Benchmark Mineral Intelligence
data.
“(This is due to) a combination of a number of factors, including strong demand for
high-nickel cathodes in the Japanese and Korean markets, as well as battery-grade
hydroxide supply tightness driven by sanctions on Russia, where some of Europe's
lithium refineries are based,” Jennings-Gray said.
Read more about what happened in the lithium market in 2022 quarter by quarter here.
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What is the lithium supply and demand forecast for 2023?

Most lithium demand comes from the EV space, which has seen upward
momentum in recent years. Global EV sales surpassed the 6 million mark in 2021,
and in 2023, Daniel Jimenez of iLi Markets is expecting demand for EVs to grow at
similar levels to 2022.
“The question is, will the lithium supply be there? And when you look roughly at the
increase of supply in the market next year, where will that be coming from? Well, it
will be coming mostly from incumbents,” he said.
Listen to the interview below to learn more about Jimenez’s thoughts on lithium in 2023.
Benchmark Mineral Intelligence expects lithium demand growth of around 40

percent in 2023 versus 2022 — a “notable step up.”
Demand from China is still seen rising the fastest, but growth is set to pick up
considerably in the rest of Asia. “Europe and North America will also notice a step
up in demand as their downstream battery supply chains begin to develop,"
Jennings-Gray said.
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As the new year begins, LFP batteries are expected to continue taking market share
from NCM, but both battery chemistries are expected to see strong growth, which
translates into good news for both lithium carbonate and lithium hydroxide.
“We do not expect such a blow out in the premium in 2023 — we expect both salts
to roughly trade at the same price level in 2023,” Fastmarkets’ Adams said.
Benchmark Mineral Intelligence is also expecting the LFP market to remain strong.
“But high-nickel cathode producers have also performed well, so it seems likely the
two chemicals' relationship will continue to interchange,” Jennings-Gray said.
“Additionally, with direct hydroxide conversion from spodumene allowing for easier
production of the chemical, it doesn't always have to be produced from converting
carbonate, removing some of the baked-in premium hydroxide has always held
over carbonate.”
Looking over to supply, Benchmark Mineral Intelligence forecasts some growth, but
not enough to see the market balance.
“As always, lithium projects are likely to face delays — typically these are technical,
but increasingly it has been about finding a knowledgeable labor force for the job,”
Jennings-Gray said.
“Other supply risks come in the form of geopolitics and climate change, such as the
issues we saw in Sichuan province in 2021 during the heatwave, or in Yichun in
December when reports of thallium in the water shut down operations for a couple
of days."
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All in all, Benchmark Mineral Intelligence is forecasting that the market will be in
deficit, although some additional supply might ease this deficit a little. In contrast,
Fastmarkets expects a small supply surplus to develop in 2023.
“We expect a relatively stronger pick-up in the US, demand to recover in Europe as
parts shortages ease and as there are long waiting lists for EVs,” Adams said. "But a
hard economic recession in Europe or the US could become a headwind — we don’t
expect it to, due to the long waiting lists, but that could change.”
Another factor that could dampen demand is subsidy changes in China, Adams
added. “While we expect a small surplus next year, we think the surplus will be
absorbed by restocking and will only help reduce the overall feeling of tightness,”
Adams said.
Fastmarkets’ research team sees 2022 lithium carbonate equivalent (LCE) demand
coming in at 698,900 tonnes, with a rise to 884,400 tonnes in 2023. Meanwhile, the
firm sees LCE supply rising from 679,400 tonnes in 2022 to 895,900 tonnes in 2023,
creating a nominal surplus of 11,500 tonnes.
What's the outlook for lithium prices in 2023?

Following another strong year, investors and market watchers are wondering
what's ahead for lithium prices.
When asked about lithium in 2023, Fastmarkets’ Adams said he expects prices to
start drifting lower in the next 12 months.
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“A supply response is already underway, with additional production coming from

new capacity, restarts and expansions,” he said. “As this supply reaches the market,
allowing for ramp-up issues and time for material to be qualified, we expect the
supply tightness to ease, which should mean consumers feel less need to chase
prices higher.”
Prices started to soften in the last few weeks of December ahead of Chinese New
Year, which comes particularly early in 2023; uncertainty related to COVID-19 is
feeding into this sentiment as well.
“However, it's very typical for lithium prices to correct slightly heading into Q1,
which is when downstream demand from the EV sector is weakest,” Jennings-Gray
said.
As mentioned, her firm is expecting demand in 2023 to be notably higher than in

2022. “Combined with the fact that feedstock supply is set to remain tight and
spodumene offtake prices still have room to rise, based on movements in the
chemicals market over early Q4, there's still plenty of upside potential for lithium
carbonate and hydroxide prices in 2023,” the analyst said. “Some legacy contracts
take longer to catch up with the spot market as well, so you need to factor that in
too.”
It's important to note that lithium traded at spot prices only reflects a portion of the
market — in fact, most lithium is locked up in contracts, which in some cases
include fixed pricing.
“Contracts by and large are not necessarily based on that spot price,” Chris Berry of
House Mountain Partners said. “What we are seeing is a situation where contracts
are indexed, and rather than focused on spot prices or fixed prices, you're going to
see pricing contracts embedded with floating pricing going forward.”
For Berry, these contracts would have floors and ceilings embedded in them to
protect both buyer and seller.
“Because at the end of the day, what we're trying to do is grow this market from a
volume perspective sustainably. And putting floors and ceilings in contracts is one
way to do that,” he said.
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Listen to the interview below to learn more about Berry’s thoughts on battery metals in
2023.
What factors will move the lithium market in 2023?

Speaking about the challenges for junior miners as 2023 begins, Jennings-Gray said
that investment remains a challenge.
“However, with the downstream becoming increasingly switched on to the raw

material disconnect, this also presents an opportunity for project developers to see
new funding coming in directly from cathode, cell and EV manufacturers,” she said.
For his part, Adams doesn't envision prices falling back below incentive levels for
many years, meaning there is a lot of opportunity.
“The challenges are getting through the permitting stages, getting labor and skilled
labor with the relevant know-how,” he commented to INN. “There are a lot of
downstream users very keen to secure supply, so they should have little difficulty
getting financed as long as they have quality projects.”
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He added that in 2023 some of the heat will come out of prices, and that could
dampen sentiment.
“But this should make for a better environment for mutually beneficial deals and
partnerships to be made, which will be all-important for matching consumers with
suppliers,” he said.
In terms of trends to watch, Jennings-Gray will be keeping an eye on alternative

sources of lithium.
“The extent of success in regards to development of hard-rock assets in Jiangxi and

Africa will be an interesting development,” she said. “Additionally, any
breakthroughs in direct lithium extraction or alternative extraction methods,
although most of these projects still seem to be focused on the midterm rather
than near term.”
Another catalyst to pay attention to next year will be how directly involved OEMs
get with the miners. “(This) could really see project pace pick up if huge investments
are offered by the customers who need lithium the most,” Jennings-Gray said.
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Speaking with INN at this year’s Benchmark Week, an entire week of conferences
centered around the lithium-ion battery supply chain, CEO Simon Moores said
OEMs have to take control of their supply chains.
“A lot of deals have been done with sort of development-stage junior mining, but a
lot of them are very weak deals,” Moores said. “Reality is these companies, these
developers need hard cash to get things up and running.”
Listen to the interview above to find out more about Moores’ thoughts on battery raw
materials.

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Lithium Market Update: Q1 2023 in

Review
Lithium prices have fallen from recent highs, but experts remain
confident in the long-term outlook for the battery metal. Find out
what moved the market in Q1.
Lithium has been under pressure in

recent months following a rally that saw
prices hit all-time highs in 2022.
But demand for the battery metal is

expected to soar in the coming decades,
with questions about where supply will
come from still to be answered.
How did lithium perform in the first quarter of 2023, and what’s ahead for the
commodity in the near term? Read on for an overview of the main news that
impacted the lithium market in Q1, plus a look at factors investors should watch for
the rest of the year.
How did lithium prices perform in Q1?

Lithium prices in China have been on a downward trend since November, although
they remain at historically high levels.
For Fastmarkets, lithium's Q1 performance was for the most part unsurprising —
the agency was expecting prices to peak by the end of 2022 and then head lower.
“We expected this to happen as a result of the producer response that was
underway with the ramp up of new supply, especially spodumene and lepidolite in
China, expansions and the restart of idle capacity,” William Adams, the firm's head
of base and battery metals research, told the Investing News Network (INN).
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Additionally, Adams said record high lithium prices were attracting direct shipments
of ore to China, which in effect was bringing forward the supply response.
“I do admit that prices came down faster and further than we thought likely … we
were not expecting demand to retreat as much as it has, which was brought on by
the severe COVID-19 hit China suffered towards the end of 2022,” he said. “The
drop in price prompted destocking, which in turn has made apparent demand look
worse than actual demand.”
Additionally, original equipment manufacturers (OEMs) have been discounting price

tags for internal combustion engine vehicles ahead of emission standard changes
in July. “This has taken market share from electric vehicles (EVs),” Adams said.
Lithium carbonate is widely used by lithium-iron-phosphate battery makers in

China, so it makes sense that lithium carbonate prices have been hit the hardest.
“The battery and cathode active material manufacturers are the ones sitting on
inventory, so we expect lithium carbonate to remain at a discount to lithium
hydroxide,” Adams said.
Spodumene prices have remained high, with the Australian government expecting
average realized prices to rise from US$3,110 per tonne in 2022 to US$4,350 in
2023. To put that into perspective, spodumene prices were hovering around the
US$425 level in 2020.
“Many Australian spodumene contracts are tied to indexes in seaborne Asia

markets, which have been higher than China,” Adam Megginson, price analyst at
Benchmark Mineral Intelligence, told INN.
“It will be interesting to see if hydroxide maintains its wide premium to carbonate in
Q2, and what the chemical pricing situation is when price clauses in spodumene
contracts shift downwards to reflect the lower-price environment seen in Q1.”
Commenting on why hydroxide prices have fallen less than carbonate, Megginson
said carbonate is more susceptible to sentiment as it is favored by traders.
© 2023 20
“Hydroxide is a structurally smaller market, which means supply remained tighter

than carbonate as overall lithium chemical demand fell,” he said. “A lot is also
shipped overseas to Japan and South Korea, where demand has been more stable.”
Lithium supply and demand dynamics in 2023

Even though the energy storage segment is picking up pace, demand from the EV
space remains a key driver for lithium, with Q1 seeing weaker demand than
analysts had expected .
“The aftermath of the massive COVID-19 hit China suffered in late 2022 led to a
build up of EV inventory at dealerships,” Adams said. “(Furthermore), the weaker
property market in China has led to households being more cautious with their
spending, plus competition from discounted internal combustion engine vehicles
have had an impact.”
Outside of China, the parts shortage, especially for semiconductors, has restrained
the production of EVs, leading to less demand for battery raw materials, Adams
said.
“But we think there is considerable pent-up demand for EVs in Europe and the US,
judging by the long EV waiting lists,” he added.
Following a strong end to 2022, Benchmark Mineral Intelligence was expecting EV

demand to cool from the start of 2023. For Megginson, that points to the
seasonality usually seen at the start of the year in the Chinese EV market.
“For lithium, this means Q1 pricing tends to be lower and Q4 pricing tends to be
higher,” he said. “Although a combination of factors, including COVID-19
precautions in China and the extreme supply tightness scenario, meant we didn’t
see this seasonality last year.”
Year-to-date, EV sales have been recovering at a steady pace, while the energy
storage and portable markets have seen quite stable demand.
“If the current trend of steady month-on-month increases in EV demand continues

through Q2, we could see an uptick in lithium purchasing activity,” Megginson said.
© 2023 21
“Although inventory built up at different points in the supply chain — particularly

finished products sat with cell manufacturers — could delay purchasing of
material.”
When it comes to supply, talks about whether the market will be flooded with new
supply or remain tight continue to be a topic of discussion for investors. For
Fastmarkets, the current surplus the market is experiencing is temporary.
“The year is likely to be a year of two halves — surplus the early part of the first half
switching to tightness later in the second half,” Adams said.
He added that some of the excess material has come from high-cost supply, much
of which is likely to be halted.
“The key to watch is whether inventory is held in tight hands, and whether when
demand recovers there is a rush to restock after the destocking that has been
dominating in recent quarters,” he said.
Meanwhile, Benchmark Mineral Intelligence is forecasting that the lithium

chemicals market will remain in deficit in 2023.
“But in the short term, inventory has built up with producers and converters over
Q1 2023, so it will take some time for the supply chain to work through this
material,” Megginson said.
OEMs look for supply, M&A activity picking up

Another trend seen in the first quarter of the year has been OEMs' increased
interest in securing supply. These moves come at a time when governments from
the US to China have pledged to phase out internal combustion engine cars, while
carmakers have set ambitious targets to electrify their fleets.
A deal that was inked in January grabbed the attention of investors and industry
analysts alike — Detroit-based GM (NYSE:GM) will make a US$650 million equity
investment in Lithium Americas (TSX:LAC,NYSE:LAC) to develop the Thacker Pass
asset in Nevada. This represents the largest investment ever by an automaker to
produce battery raw materials.
© 2023 22
“Strong demand means we expect to see more activity in terms of downstream

players moving upstream, either via direct investment in lithium-mining projects or
through offtake,” Megginson said. “For now, the market remains very diverse with a
multitude of players, but pricing will dictate the extent of market consolidation.”
Later in the quarter, merger and acquisition activity also picked up. Top lithium
producer Albemarle (NYSE:ALB) made a US$3.7 billion takeover offer for Liontown
Resources (ASX:LTR,OTC Pink:LINRF), which was rejected. Another Australian
company, Essential Metals (ASX:ESS,OTC Pink:PIONF), declined a bid from the joint
venture formed by Tianqi Lithium (OTC Pink:TQLCF,SZSE:002466) and IGO
(ASX:IGO,OTC Pink:IPGDF).
“These lower prices are likely to encourage more M&A,” Adams said.
What's ahead for the lithium market in 2023?

The second quarter of the year is well underway, and there are a few key catalysts
lithium-focused investors should keep an eye on.
Megginson said there are early signs of price stability in the Chinese market.
“However, traders outside of China and bulk consumers are more bearish, with the
latter reluctant to start restocking. So there is definitely conflicting sentiment on
where prices are moving in the market,” he said.
Commenting on prices, Adams pointed out that levels are still dropping in April and
may have further to fall.
“But we are now seeing production cuts at some of the higher-cost lepidolite
operations in China,” he said. “We expect the price fall will make direct shipments of
ore and the processing of tailings uneconomical, so we expect supply to tighten.”
A key factor to watch in the next few months is more announcements from OEMs
looking to secure supply.
© 2023 23
“(What's more), China has been stepping up its lending — that should lead to a
(delayed) stronger economic recovery,” Adams said. “(Also), as the parts shortage
fades, the EU/US OEMs are likely to lift EV production rates.”
As Q2 began, the lithium space was hit with news from top producer Chile, which
has decided to nationalize its lithium industry.
“It will be interesting if this has implications for future projects in the country versus
its neighbors, although near-term impact is set to be minimal,” Megginson said.

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Cobalt Market 2022 Year-End Review

What happened to cobalt in 2022? Our cobalt market update outlines
key market developments quarter by quarter.
Cobalt prices rallied in the first several

months of 2022 on the back of steady
electric vehicle (EV) demand, but the
battery metal was unable to sustain its
gains throughout the year.
Despite this pullback in prices, governments

around the world continue to push for a
green energy transition, turning market watchers' attention to key raw materials
used in batteries such as cobalt.
Read on to learn what happened in the cobalt market in 2022, including supply and
demand dynamics, and what market participants had to say during each quarter of
the year.
What happened in the cobalt market in 2022?
Cobalt market in Q1: Strong demand supports prices
In Q1, cobalt's performance was mostly as expected, with tight conditions persisting
and strong demand continuing from the battery market, Harry Fisher, then of CRU
Group, told the Investing News Network (INN).
“Russia’s invasion of Ukraine was of course the key shock which has tightened the
screws further on the market,” he said. Russia is the world’s second largest
producer of cobalt, with 2021 output of 7,600 metric tons (MT), as per the US
Geological Survey.
After averaging US$24 per pound in 2021, European metal prices started the year
at around US$32, but rose on the back of constrained conditions and uncertainty
around the war in Ukraine. By the end of March, European prices were near US$40.
© 2023 25
“We expect that market tightness will continue while global supply chains remain
constrained and keep intermediate payables high,” Fisher said. While conditions
were seen easing in H2, the impact of the Russia-Ukraine war called that into
question.
EV forecasts at the start of the year indicated that the strong sales trend seen in
2021 would not slow down in 2022. That’s why many experts predicted that cobalt
demand would continue to enjoy healthy levels for the year.
“We now expect cobalt demand to be even stronger as EV sales continue to

accelerate,” Fisher said. CRU’s forecast at the time was for 3.6 million additional
new energy vehicle (NEV) sales year-on-year in 2022, with global penetration
reaching 12 percent.
Looking over to cobalt supply, CRU was forecasting around 40,000 MT of mined
supply growth in 2022. Last year, cobalt mine output rose 12 percent year-on-year
to 160,000 MT after falling in 2020. The Democratic Republic of Congo was the top
producer.
“Although more than 60 percent of this is from the Democratic Republic of Congo,
this remains at risk from the supply chain constraints already mentioned,” Fisher
said.
Cobalt market in Q2: Price rally takes a pause
Prices for the commodity stabilized in the first three months of 2022, but took a
breather in the second quarter.
Speaking with INN about the price pullback seen in the second quarter, Cameron
Hughes of Benchmark Mineral Intelligence said at the time that cobalt sulfate prices
initially led the retreat. He pointed to the impact of China's COVID-19 restrictions,
which were felt sharply across the country's domestic battery supply chain in early
April.
“The downturn was later felt across the entire cobalt complex as metal prices and
hydroxide payables recorded similar declines in May, with all three grades
continuing to fall throughout the remainder of the quarter,” he said.
© 2023 26
Once the correction began, it became clear that prices had substantial downside
potential. That's because Chinese prices had been trading at much lower levels
than the international market in recent months, Hughes said at the end of Q2.
Demand from the EV sector was stronger than many had expected in 2021, but
Chinese lockdowns paired with macroeconomic factors impacted the space in the
second quarter.
Even so, NEV sales rebounded quickly in China, rising 50 percent month-on-month
in May and 33 percent month-on-month in June. In fact, June sales hit a new
monthly record of 596,000 units, as per CRU data.
In Q2, CRU revised its forecasts for mine supply slightly, predicting a rise of over
42,000 MT, up 26 percent year-on-year. “This will mean that the market should
certainly be more balanced than in 2021, when a significant deficit developed,”
Fisher said.
Cobalt market in Q3: Demand for electronics takes hit
After pulling back in the second quarter, cobalt prices began to stabilize in Q3.
“Spot demand for cobalt was tepid throughout (the third quarter), despite strong
Chinese EV and battery production, given large inventories of raw material
accumulated throughout 2022,” Hughes said.
“The majority of demand from cell manufacturing was absorbed by long-term

contracts, cobalt contained in mixed hydroxide precipitate from Indonesia and
cobalt recycling.”
Prices found support in late August due to perceived tightness in the US superalloy
market and robust alloy grade demand, according to Benchmark Mineral
Intelligence data.
“This provided upward momentum for metal prices, which subsequently supported
sulfate and hydroxide prices,” Hughes said at the end of Q3. “As this tightness
subsided in September, prices stabilized throughout the month.”
© 2023 27
In Q3, macroeconomic headwinds continued to hit the cobalt sector, limiting

demand from several industries.
The most significant impact has been on cobalt demand from consumer
electronics, which is down almost 10 percent year-on-year, according to Benchmark
Mineral Intelligence.
“There has also been limited demand from energy-intensive cobalt end markets,
such as the ceramics industry, given increasing energy prices,” Hughes said.
“Although sectors like ceramics are relatively small industries, this demonstrates a
wider trend of energy-intensive processes having to be cut back.”
Looking at supply, Project Blue’s Jack Bedder pointed out that cobalt material was
flowing out of Africa reasonably easily at the time. “But any changes there could
add tightness (to the market),” he added.
Cobalt market Q4: EV demand to remain strong
The EV sector remains a top demand driver for cobalt. The industry has grown
significantly in the past two years, driven primarily by China, but with regions such
as Europe also showing strength.
Looking at what might be ahead in 2023, Iola Hughes of Rho Motion told INN the
upside is strong for the EV market, highlighting China's role in the sector. Speaking
about the different cathode chemistries leading the industry, Hughes said North
America at the moment is dominated by nickel-cobalt-aluminum.
“The remainder of the market is being made up by nickel-cobalt-manganese, with a

little bit of lithium-iron-phosphate (LFP) coming through from imports of China,” she
said. “In China, the LFP story has really been stepping up this year — we're seeing
close to 40 percent of that market being LFP cathodes.”
When looking at what might be ahead for cobalt, total cobalt supply is estimated to
be 206,000 MT in 2023, an increase of 26,000 MT from 180,000 MT in 2022,
according to Fastmarkets’ research team. Meanwhile, demand is forecast to
increase by 17,000 MT to 194,000 MT in 2023. Despite this year-on-year increase,
the market is expected to be in a supply surplus of 12,000 MT in 2023.
© 2023 28
“We saw cobalt prices correct, (as) the cobalt market isn't in deficit at the moment,
and there's adequate supply for demand,” Caspar Rawles of Benchmark Mineral
Intelligence told INN. “Part of that is down to the fact that there's been a bigger
uptake of LFP in China than was originally anticipated … and importantly, this year
in particular what we've seen is sort of lackluster demand from the consumer
electronics industries, smartphones and laptops.”
But even as the share of LFP might continue to grow, cobalt demand from the EV
sector is expected to remain high.
“Despite the prevailing transition to lower cobalt cathode chemistries and the
growing share of non-cobalt chemistries, the cobalt bearing
(nickel-cobalt-manganese) chemistry will remain the dominant chemistry in the
foreseeable future," said Andries Gerbens, a physical trader at Darton
Commodities. "Furthermore, the sheer absolute growth in EV sales will mean that
EV-related cobalt demand will continue to accelerate in the years to come."

© 2023 29
Cobalt Market Forecast: Top Trends That

Will Affect Cobalt in 2023
What is the cobalt forecast for 2023? Analysts share their thoughts.
Pull quote was provided by Investing News

Network client Fortune Minerals. This article is
not paid-for content.
This time last year, cobalt market

watchers were expecting demand from
the electric vehicle (EV) sector to
continue to thrive, with prices for the
commodity expected to remain firm following a strong 2021.
While cobalt did remain high in the first few months of 2022, it was unable to hold
onto gains as the market was well supplied.
With the new year now in full swing, the Investing News Network (INN) reached out
to cobalt experts to get more insight about the cobalt forecast for 2023. Here's
what they had to say about the market.
How did cobalt perform in 2022?

Cobalt prices beat expectations in 2021, surging on the back of increased demand
from the EV space. But at the end of that year, the market was expected to
transition back into a slight surplus in light of the commissioning of new projects in
Indonesia and increased supply from the Democratic Republic of Congo (DRC), the
world's top-producing country.
Cameron Hughes of Benchmark Mineral Intelligence told INN the cobalt market
performed in line with expectations in 2022.
“The market was forecasted to enter a small surplus in 2022, so it is not too
surprising prices are ending the year lower than where they were at the end of
© 2023 30
2021,” he commented. “Of course, some things which impacted the cobalt market
in 2022 were unpredictable, such as the COVID-19 lockdowns in China.”
China's COVID-19 restrictions were felt sharply across the country's domestic
battery supply chain in the first half of the year. Even so, long-term market
fundamentals stopped prices from crashing or reaching unprecedented heights,
Hughes said.
Jack Bedder of Project Blue also said there were not any major shocks in terms of
market performance. “The zero-COVID policy in China ultimately impacted portable
electronics demand, which in turn dented lithium-cobalt-oxide demand,” he said.
Most commodities prices sold off sharply in 2022, impacted not only by Chinese
lockdown measures, but also by monetary policy in the US and fallout from the
energy crisis caused by the Russia-Ukraine war.
“We expect the impact of all these factors to resolve or ease off in 2023,” said
Benedikt Sobotka.
“Furthermore, we believe the market has overreacted and is at odds with the actual
state of most commodity markets. We anticipate that the demand structure for
many commodities is undergoing a fundamental shift driven by the global net-zero
transition," added the CEO of top cobalt supplier Eurasian Resources Group.
What is the cobalt supply and demand forecast for 2023?

As 2023 begins, demand for cobalt from the EV industry is anticipated to continue
to increase. BloombergNEF is forecasting a fast rise in passenger EV sales, with the
number jumping from 6.6 million in 2021 to 21 million in 2025.
“Lithium-iron-phosphate (LFP) cathode technology may limit this increase; however,

the current EV penetration rate means demand for cobalt will continue to grow,
with nickel-cobalt-manganese technologies remaining the dominant cathode type,”
Hughes of Benchmark Mineral Intelligence explained to INN.
Bedder believes investors shouldn't worry about the surge in cobalt-free cathode
technologies such as LFP. “As has been the case for the past decade, batteries will
© 2023 31
continue to drive demand dynamics,” he said. “Cobalt demand in lithium-ion

batteries is set to increase at 11.3 percent per year. In the near term, the threat of
cobalt substitution is low as this represents a longer-term trend.”
Similarly, Hughes said that although this may be a significant factor in the future,
cobalt consumption is still anticipated to increase significantly this decade due to
the growth the EV market will experience.
“The rate the EV market is growing is more than enough to offset that decreasing
volume of cobalt in cathodes,” he added.
Looking over to other demand segments, usage by the consumer electronics

market was limited in 2022.
“(This sector) is showing few signs of improvement in the near term,” Hughes said.
“However, later in 2023, this market may recover, which could have a significant
impact on the market balance given the size of this industry.”
For Benchmark Mineral Intelligence, sectors such as aerospace, military and

medical are anticipated to remain robust, and all of them will help keep the market
for cobalt fairly tight next year. “Finally, demand from energy-intensive industries,
such as ceramics, which have been rocked by the energy crisis, will depend on
where energy costs go moving forwards,” Hughes said.
Looking at how demand has performed in the last few years, Project Blue data
shows that cobalt consumption increased by 8 percent per year over the 2013 to
2021 period, although growth stalled between 2019 and 2020 due to the pandemic.
“Project Blue expects cobalt demand to continue to grow at a very similar rate (8.9
percent per year) between 2021 and 2027," Bedder said.
The firm expects mine supply to increase by 11 percent per year through 2027 in
order to keep pace with growing demand.
“In the DRC, existing producer output is expected to underpin growth, with the
ramp-up of Mutanda being a key factor,” Bedder said. Mutanda, the world's largest
cobalt mine, closed in November 2019, but was restarted in H2 2021.
© 2023 32
“(However,) new mine projects are required if supply is to meet demand," said
Bedder, noting that the two key projects to watch are Chemaf’s Mutoshi and CMOC
Group’s (OTC Pink:CMCLF,SHA:603993) Kisanfu. “Outside the DRC, I expect the
demand narrative to be supportive of new copper-cobalt and nickel projects — but
there may be various headwinds."
Excluding the DRC, the main area of growth for cobalt supply is currently Indonesia,
where increasing volumes of cobalt contained in mixed hydroxide precipitate are
flowing out of high-pressure acid leaching projects.
“Consequently, later in the decade, Indonesia will become the second largest
cobalt-producing country in the world,’’ Hughes said. “Elsewhere, further
investment is anticipated in North America and countries with a free trade
agreement with the US, as OEMs hope to make use of the Inflation Reduction Act
(IRA) credits.”
The IRA was signed into law in 2022 in another move to develop the US lithium-ion
supply chain. Under the legislation, automakers must ensure that 50 percent of
critical minerals used in EV batteries come from North America or US allies by 2024.
“More overseas companies will hope to make inroads into North America to take
advantage of the IRA, as well as the growing EV market in this region,” Hughes said.
“It is also important to note there is an election in the DRC next year. As mining is a
huge part of the country's GDP, it will be a major topic discussed during the
election.”
In other supply trends expected in 2023, Benchmark Mineral Intelligence is

anticipating that secondary supply of cobalt from recycling will continue to grow,
having already increased in 2022.
“Due to increased supply from the DRC and Indonesia in 2023, along with limited
demand from the consumer electronics industry and other energy-intensive
industries, we expect to see the market in a sizable surplus next year,” Hughes said.
© 2023 33
What factors will move the cobalt market in 2023?

Looking at what might be ahead for cobalt prices in 2023, Bedder expects them to
fall back a little further in Q1.
“They should strengthen as the year goes on — and as demand picks up,” he said.
“But for now I think there is sufficient intermediates, metal and chemical supply.”
Benchmark Mineral Intelligence also anticipates that prices will fall in early 2023
given surplus forecasts. “However, it is important to note the oversupply will come
from excess cobalt contained in hydroxide, whilst the metal market will remain
relatively tight,” Hughes said. “This, along with robust long-term cobalt demand, is
expected to prevent prices falling too far in 2023.”
Although the overall market will be in oversupply, the metal market will remain
relatively tight.
“That’s given limited planned growth in metal refining, and robust demand from
aerospace and military sectors,” Hughes said. “This may limit the downward
potential of cobalt prices.”
An interesting catalyst for investors to watch will be developments at the Tenke

Fungurume mine in the DRC.
“Exports have been blocked from the mine for several months and the dispute
seems to be escalating, with local reports suggesting CMOC may look for
compensation from Gécamines,” Hughes said. “As one of the largest cobalt mines in
© 2023 34
the world, if the dispute continues it could majorly impact the market balance in
2023.”
In 2023, junior miners may struggle to obtain project financing in a falling price
environment.
“Although it is important to remember cobalt is primarily a by-product, so this will

depend on the primary product of the mine,” Hughes said. “In general, the miners
are also competing with alternative supplies of cobalt from high-pressure acid
leaching projects and recycling, again making it harder to secure financing for new
mines.”
Don’t forget to follow us @INN_Resource for real-time news updates.

Cobalt Market Update: Q1 2023 in Review

Cobalt supply remains higher than demand, leaving prices under
pressure. Find out what other dynamics moved the market in the first
quarter of 2023.
Battery metals have been making

headlines in recent years as interest in
electric vehicles (EVs) continues to surge.
However, when it comes to cobalt, prices

have been facing downward pressure since
mid-2022. And even though the market has
© 2023 35
seen some recovery, most analysts predict supply will continue to exceed demand
in 2023.
With those sector dynamics in mind, the Investing News Network (INN) reached out
to experts to get their thoughts on cobalt in Q1. Here's what they said about supply
and demand, and what they see coming for the rest of the year.
How did cobalt prices perform in Q1?

Cobalt prices rallied from the end of 2020 to the beginning of 2022 on the back of
strong demand from the EV sector. The portable electronics segment also saw
increased demand during the COVID-19 pandemic, but higher supply paired with
sluggish demand has put pressure on prices since June of last year.
During Q1, prices continued to drop from the highs seen in 2022, Roman Aubry of
Benchmark Mineral Intelligence told INN.
“Downstream demand for battery materials has been weakening since Q4 2022,
while cobalt supplies from the Democratic Republic of Congo (DRC) have been
abundant, leaving cathode manufacturers little incentive to buy spot volumes,” he
said.
The DRC is the world’s top cobalt producer, with mine output reaching 120,000
metric tons in 2022, according to the US Geological Survey. The African country
increased mine supply by 22 percent last year, or 26,700 metric tons, Darton
Commodities says.
As of mid-April, cobalt sulfate on an ex-works China basis was down by more than
19 percent year-to-date at US$5,256 per metric ton, Benchmark Mineral Intelligence
data shows.
“While some price erosion in Q1 was expected, the pace and strength of the decline
did catch the market off guard,” Aubry said. “Downstream inventories were greater
than expected, and few market participants expected cathode manufacturers to
face such diminished order books during the quarter.”
Cobalt supply and demand dynamics in 2023
© 2023 36
Despite the decline in prices, overall demand for cobalt is still up compared to Q1
2022.
“We can expect EV and battery demand to continue solidly throughout Q2,” Aubry
said. “However, the demand growth has cooled, and inventories throughout the
supply chain continue to meet downstream demand and restrain upstream spot
demand.”
Industrial demand for cobalt metal has been robust in the aerospace sector,
especially in North America. “Industry statistics show a substantial uptick in air
travel following the 2020 to 2021 lull caused by the coronavirus pandemic,” Aubry
said.
Cobalt's ability to stand up to high temperatures and its good oxidation resistance
make it an important element for superalloys, which are used for casting airfoils
and other structural parts of jet turbine engines.
“While cobalt alloy of Chinese origin is unlikely to be sold to US manufacturers, alloy

stocks held in European warehouses could be shipped to the US at a profit,” Aubry
said. “In theory, they could be replenished with cheaper alloy from Chinese
producers using hydroxide as feed. Although metal qualification requirements may
hinder this 'swap.'”
Looking over to the supply side of the story, cobalt mine output saw its largest
increase ever recorded in 2022, increasing 23 percent year-on-year, Darton
Commodities states in its 2023 Cobalt Market Review.
“Following a high price environment in 2021 all the way through early 2022, the
demand outlook was extremely strong, which encouraged a lot of mining
companies to try and maximize their output,” Andries Gerbens, physical trader at
the firm, told INN.
“A significant increase in cobalt mine production in the DRC, combined with a

significant increase in mixed hydroxide precipitate production in Indonesia, added
a lot of additional cobalt units to the supply base.”
© 2023 37
In 2023, Benchmark Mineral Intelligence is still forecasting a surplus in the cobalt

market.
“High-pressure acid leach (HPAL) operations in Indonesia will grow over the year,
adding more supply to the cobalt market,” Aubry said. “Additionally, we expect the
DRC capacity to continue to increase.”
The DRC dominates cobalt mine supply, and it is unlikely that will change any time
soon. Companies operating in the African country include Glencore (LSE:GLEN,OTC
Pink:GLCNF), Zhejiang Huayou Cobalt (SHA:603799) and Eurasian Resources Group.
“While other countries are expanding their cobalt output, none are positioned to
dethrone the DRC,” Aubry said. “Indonesia in particular is in a massive growth
period and has opened three HPAL plants in the last two years, one of which has
just recently begun shipping in January.”
Events in Indonesia bring another key player in the cobalt space to the table: China.
In 2022, China refined 91 percent of the world’s cobalt chemical supply and
accounted for 76 percent of global refined cobalt production, according to Darton
Commodities.
“(Indonesian) plants relied heavily on Chinese investment and know-how, further

contributing to Chinese influence in the cobalt space,” Aubry said.
The DRC is home to the majority of the top cobalt mines, but seven out of 10 are
Chinese-owned.
“There's still a growing interest, within China itself, possibly even from the refiners,
to back integrate into mining, and therefore it would only make sense for them to
be looking at DRC operations,” Gerbens said.
But with recent developments, and with the approach that the DRC government is
taking towards some Chinese mining companies right now, there is a bit of a
change taking place.
© 2023 38
“It may not be as straightforward as it was before, where it was automatically

assumed that if there's a new asset, most likely it's going to be Chinese owned, or
it's going to be the purchase by a Chinese company,” he said.
Western governments have been trying to ensure they have secure and resilient
supply chains for critical minerals, and legislation such as the US Inflation Reduction
Act and the European Critical Raw Materials Act expected to bring more support for
domestic and regional value chains.
“Western governments will need to invest throughout the supply chain if they wish
to disentangle themselves from Chinese influence in the cobalt market,” Aubry said.
But beyond geopolitics, there are wider ESG concerns around mining in the DRC, in
particular artisanal mining, the analyst said.
“This is a much more urgent supply chain concern, with downstream pressure to
minimize DRC dependence,” Aubry added.
What's ahead for the cobalt market in 2023?

As Q2 begins to unfold, there are a few catalysts investors interested in the cobalt
space should watch out for.
“Freight prices have returned to much more normal levels and are looking
reasonably low this quarter,” Aubry said. “If they were to go up, this could see
delivered prices increase, but likely at the expense of some spot demand.”
Additionally, some Chinese refiners may be looking to make a profit by buying

hydroxide at low prices and converting it into cobalt metal to sell, he added.
“The cost of converting hydroxide into metal is currently a lot cheaper than buying
metal at today's prices, and we've heard that several refiners may already be
looking into this for Q2,” Aubry said. “This would somewhat improve hydroxide
demand, though it is unclear to what extent.”
In terms of prices, a surge in demand from cathode manufacturers is unlikely

during the second quarter.
© 2023 39
“So notwithstanding a black swan event, hydroxide and sulfate prices are likely to
remain suppressed,” Aubry said.
Furthermore, the recent resolution to the dispute between CMOC Group (OTC
Pink:CMCLF,SHA:603993) and Gecamines over Tenke Fungurume mining royalties
could unleash substantial cobalt hydroxide inventory. The Chinese company was
banned from exporting since last July, but kept the mine running. Tenke
Fungurume accounts for about 15 percent of global production.
“It is worth noting that because it has been a question of 'when' rather than 'if' the
dispute would be resolved, we expect that some of the resulting bearishness is
already baked into today's weak prices,” Aubry said. “However, some further
hydroxide price erosion through Q2 does seem inevitable.”
In contrast, metal prices are a little more positive, with strong industrial demand
indications from the US and Europe.
“However, if Chinese refiners choose to capitalize on the arbitrage between low

cobalt hydroxide prices in Asia and high cobalt metal prices in western markets, we
could see the positive metal price trajectory stabilize,” Aubry added.
Don’t forget to follow us @INN_Resource for real-time news updates.

© 2023 40
Graphite Market Forecast: Top Trends

That Will Affect Graphite in 2023
What's ahead for the graphite market in 2023? Read on to learn
more about what analysts expect for the year.
Pull quote was provided by Investing News

Network client NextSource Materials. This
article is not paid-for content.
Graphite is an essential raw material

used in electric vehicle (EV) batteries,
and as sales of EVs continue to grow,
market watchers believe demand for the
battery metal will surge.
Despite discussions on battery chemistry changes and new technological

breakthroughs, many experts think graphite will remain a dominant element in EV
batteries for at least the next decade. Both synthetic graphite and natural graphite,
in the form of the intermediate product spherical graphite, are used in the anodes
of lithium-ion batteries.
Here the Investing News Network (INN) looks at key trends in the graphite market
in 2022 and the graphite forecast for 2023.
How did graphite perform in 2022?

At the end of 2021, analysts were expecting the EV segment to be key for the
graphite market going forward, challenging traditional industrial applications as the
main driver of demand.
By volume, graphite is one of the most important elements in any EV battery — in

total, between 50 and 100 kilograms of graphite, whether synthetic or natural, are
present within each vehicle.
© 2023 41
Today, synthetic graphite anodes dominate in terms of market share, accounting

for approximately 57 percent of the anode market, according to Benchmark
Mineral Intelligence. But concerns over the energy intensity of synthetic graphite
remains a global challenge when it comes to ramping up supply of this anode
material.
“In China, efforts have been concentrated on developing synthetic graphite anode
facilities in the southwestern provinces, where renewable energy, particularly
hydroelectric power, is more readily available, after energy restrictions in other
regions have become a concern,” Benchmark Mineral Intelligence analyst Daisy
Jennings-Gray told INN back in June.
Additionally, rising oil prices amid the global energy crisis have given way to
concerns over feedstock costs for synthetic graphite. That’s because the favored
needle coke feedstock is a by-product of oil refining.
Graphite prices increased over the first few months of 2022, coming off a 2021 that
saw most battery raw materials jump. But the last few months of the year saw
prices remain muted, with volatility dominating the sector.
“Graphite prices have slipped from their early-2022 highs, reflecting both a
resumption of more normal production and shipments from graphite producers in
China and Africa, and a significant downturn in demand from the steel industry,”
Amy Bennett, principal consultant at Fastmarkets, said in a recently published
article.
“Traditional graphite applications have seen sharp declines this year, with global
crude steel production volumes tumbling.”
© 2023 42
Another trend seen in the entire battery raw material space in 2022 was moves
from western governments to decrease dependence on China. The dominance of
China in the graphite space is evident, with the Asian country controlling about 64
percent of natural graphite supply, according to data from Benchmark Mineral
Intelligence.
“I think we'd be foolish to sit here and say that we're going to displace China
overnight. Of all areas of the supply chain, the graphite anode part is where China
is the most dominant,” said Andrew Miller, chief operating officer at Benchmark
Mineral Intelligence. He sees displacing China as essential but difficult, and believes
diversification needs to happen quickly.
In 2021, China remained the world’s largest natural graphite producer, putting out
820,000 metric tons (MT) of the material, significantly higher than the amount it
produced in the previous two years. According to the US Geological Survey, the
country accounted for 79 percent of world graphite mine output in 2021. Brazil
came in second and was followed by Mozambique, with production reaching 68,000
MT and 30,000 MT, respectively.
What is the graphite supply and demand forecast for 2023?

As 2023 begins, graphite and other key battery metals are positioned to benefit
from the rise of the EV sector.
The EV industry has been growing over the past two years, with global sales
surpassing the 6 million mark in 2021. There is still major upside moving forward,
and many forecasts point to a strong market in the coming years as carmakers
continue to commit to the electrification of their fleets and governments push
towards a green energy transition.
When compared to lithium or nickel, graphite is been overlooked, in part because

its industrial uses have always been the main driver for demand — but that might
be about to change.
© 2023 43
“We're now projecting that by the end of next year, batteries will be the number
one leading market for graphite,” Miller said during a keynote presentation at
Benchmark Week. “So this is a turning point for the industry.”
In order to meet this unprecedented demand, Benchmark Mineral Intelligence

estimates that up to 150 new operations across natural and synthetic graphite are
needed by 2035.
“The volume, the rate at which the graphite market has been growing, has
particularly accelerated over the last couple of years,” Caspar Rawles, chief data
officer at Benchmark Mineral Intelligence, told INN. “We've seen growth rates in
2021 and 2022 at around 40 percent year-over-year.”
Listen to the interview below to learn more about Rawles' thoughts on the anodes and
cathodes space in 2023.
“Graphite is the largest component by weight, compared to any other battery raw
material that goes in a battery … so each gigawatt hour or megawatt hour of
capacity that's deployed has a big impact on graphite,” Rawles said. “And to some
© 2023 44
extent, while we have seen some investment in new graphite production capacity, it
has not been adequate.”
Money needs to start coming urgently now to address the future issues that the
industry is facing, as bringing new mines online is not an easy task. “The issue in the
extraction is the timeframe to bring that new raw materials to market,” Miller said.
“So when we talk about getting fresh, new raw material out of the ground, the
industry needs to start developing those operations today to meet that potential
deficit of 2027, 2028," he added.
Despite talks about new technology breakthroughs, Benchmark Mineral Intelligence

is forecasting that natural and synthetic graphite anodes will continue to capture
the majority of market share up until 2040.
“We really believe that graphite-dominant anodes will continue to capture the
majority of market share due to established processing and production
technologies at present, meaning automakers have qualified these chemistries into
their supply chains,” explained George Miller, senior analyst at Benchmark Mineral
Intelligence.
“And this is really combined with favorable cost stability and performance of
battery-based anodes.”
Within graphite-based anodes there will be room for both natural and synthetic
graphite, but experts agree that the tide will turn in favor of natural graphite.
“Although there is currently greater global demand for synthetic anodes, demand
for natural anodes is predicted to overtake synthetic this decade,” Miller said.
By 2030, Benchmark Mineral Intelligence is forecasting that natural graphite anode

material supply will grow by 95 percent, with demand increasing by 450 percent in
the same time period.
Fastmarkets is also expecting both natural and synthetic graphite to be used widely
over time.
© 2023 45
“However, we are expecting to see rising natural graphite consumption increase to

reflect the cost advantage of using natural graphite, as well as at the same time
overcoming some of the ESG considerations,” Bennett commented.
All in all, the firm is calling for the natural graphite market to remain largely in
deficit until 2025, with the outlook being dependent on increased graphite
production, primarily in China and Mozambique.
“The addition of new capacity has already faced significant delays, however, and we
expect continued struggles for many new entrants, with an appreciable influx of
new supply not expected to hit the market — and to remedy the growing
underlying supply/demand imbalance — before 2025,” Bennett said.
Fastmarkets expects to see an increasingly dynamic graphite market in 2023, with

notably higher prices next year. “This will reflect both incredible underlying market
demand and higher costs associated with graphite production,” she added.
Don’t forget to follow us @INN_Resource for real-time updates!

© 2023 46
Vanadium Market Forecast: Top Trends

That Will Impact Vanadium in 2023
What’s ahead for the vanadium space? Read on to see what market
watchers see for the vanadium forecast in 2023.
Heading into 2022, experts were

expecting vanadium demand to increase
on battery segment attention.
While most vanadium is used in China for

steel applications, particularly the
high-strength, low-alloy steel used to make
construction rebar, the metal has a growing
role in batteries that is attracting interest.
As the year comes to an end, what can investors expect for vanadium in 2023? Read
on to learn more about vanadium’s performance in 2022, as well as what analysts
and market watchers are forecasting for next year.
How did vanadium perform in 2022?

As mentioned, at the end of 2021, analysts were expecting vanadium demand to
grow in 2022. But the first few months of the new year were shocking for metals
markets as Russia's invasion of Ukraine brought volatility to the commodities
sector.
All in all, the story of the vanadium industry in 2022 was almost exclusively
determined by the Russia-Ukraine conflict, Willis Thomas and Connell Murphy of
CRU Group told the Investing News Network (INN).
“Vanadium has not been affected to the same extent many other commodities have
been in the wake of the conflict, but initial sentiment saw prices almost double in
March due to the invasion,” they said. “This was due to the risk of losing the large
© 2023 47
supply of ferrovanadium into the European steel market through the

Russian-owned Evraz.”
Sanctions hit Roman Abramovic, the biggest shareholder of Evraz, a major

vanadium producer with assets in Russia and Czechia, leading to the resignation of
the company's entire board.
“Due to Evraz trading vanadium oxide into the Czech Republic, where it is then
processed into ferrovanadium, however, very little impact has been seen,” the CRU
analysts said. “This has been confirmed by the market, with prices dropping since
March and resting back at pre-conflict prices for the past four months.”
Commenting on the performance of vanadium in 2022, Jack Bedder of Project Blue

also said that despite initial fears, there has been no meaningful disruption of
vanadium flows as a result of the Russia-Ukraine conflict or sanctions.
“We expected more subdued demand from China ― and this proved to be the
case,” he said. “(There were) no major surprises on the supply side ― although of
course the Russia-Ukraine war was unexpected.”
In the first half of the year, the market also moved from worrying about supply risks
due to the ongoing Russia-Ukraine war; instead, demand risks took over as China’s
lockdowns impacted the sector.
“Demand in China has been lower than expected as a result of steel production
curbs in China enforced due to the Winter Olympics, and extended COVID-19
shutdowns,” Bedder said back in June.
Lockdowns in China impacted demand, but not as much as some had anticipated
during the first half.
“Lower steel production for rebar and some slowdowns in battery projects came as
a result, with delays more than anything,” CRU’s Thomas told INN back in June.
Speaking about the battery sector, Thomas said there have been more investments
for electrolyte capacity, so there will certainly be increased demand moving
forward. “Vanadium battery demand expectations are notoriously difficult to meet,
© 2023 48
with issues of supply and for the battery projects themselves being common,” he
said.
Vanadium is a key metal used in vanadium redox batteries (VRFBs), which are a
viable option for large-scale storage because they are able to provide hundreds of
megawatt hours at grid scale.
In contrast to the volatility of H1, a steady and subdued market persisted with
much lower prices in the second half of the year.
“As is the case with all ferroalloys, demand from the steel sector was subdued
owing to trends in China, principally its zero-COVID strategy and faltering property
and construction sectors,” Bedder said. “Vanadium prices were impacted
accordingly and fell back.”
But in the last quarter, activity picked up a little. “Rebar stocks are slowly being
drawn down, although restocking is typical of this time of year with producers
preparing for higher demand to come,” Bedder said.
While steel demand is down, aerospace demand for vanadium (and other metals)
was a bright spot in Q4.
“In addition, more announcements of VRFB electrolyte capacity and planned

installations continue to suggest that the technology is gathering momentum,”
Bedder added.
What factors will move the vanadium market in 2023?

As 2023 kicks off, global demand for vanadium is once again expected to increase,
according to CRU, as many industries ― steel, chemicals, aerospace, batteries and
more ― are still seeing growth coming out of COVID-19.
“(There is) steady growth seen in chemicals, temporary growth seen in the steel
sector and accelerating growth seen in both aero and batteries,” Thomas and
Murphy said.
© 2023 49
Similarly, Project Blue expects the overall market to grow at a CAGR of 2.7 percent
over the 2021 to 2027 period, although it expects a 5 percent decline between 2021
and 2022.
“Over the five year horizon, demand in steel is set to increase, supported by
high-strength, low-alloyed output and higher intensity of vanadium use,” Bedder
said. Alloy demand growth is expected, but will be a slow recovery from COVID-19
impacts.
As a whole, the firm is not expecting demand to reach 2019 levels again until the
late 2020s.
“Growth in chemicals demand will be moderate with no novel applications set to

boost demand,” Bedder added.
Looking in particular at the steel sector, coming into 2023 Project Blue expects
consumption to be roughly in line with 2021 levels. CRU expects to see growth in
demand due to China exiting their zero-COVID policy eventually.
“This will temporarily result in an overall increase in vanadium demand from steel,
which will see decreases in following years due to reduced steel production, though
intensity gains will offset this to a degree,” Thomas and Murphy said. “Past 2023,
however, due to China’s peak in steel production following 2020, the vanadium
demand in the steel sector will see a slight decline.”
In terms of the battery segment, Project Blue expects to see continued

commercialization of vanadium redox batteries in its base case. Its current
projection is set at more than 35 percent per year growth to 2027, with demand to
be driven by China.
“I think we will continue to see more announcements regarding planned

installations, but the question is how big will these batteries be, and thus how much
vanadium will they need?” Project Blue's Bedder explained to INN. “I also expect
more commitment to build electrolyte capacity.”
CRU is also forecasting continued battery growth in China, with large-capacity

additions being almost exclusively within this region.
© 2023 50
“Demand for the battery segment, due to the low volume of capacity additions
currently, is often annually set by one or two large projects being produced in
China,” Thomas and Murphy said. “Going into 2023 we expect an increase in
demand compared to 2022 as some large VRFB projects are expected to begin
construction, as well as numerous smaller commercial-scale projects.”
According to the analysts, the introduction of low-cost, primary production

continues to be the main challenge for vanadium production going into 2023.
“Without this we will see demand destruction going forward,” they said. “This comes
down to a balancing act of high enough prices to incentivize production, but not so
high that niobium replacements are seen in steel and alternative long-duration
energy storage is seen in the battery sector.”
In terms of prices, the analysts said they will increase steadily coming into 2023.
“This will be off the back of a large forecast of battery capacity with relatively steady
demand seen in other sectors,” Thomas and Murphy said. “Supply will be able to
partially meet this growth in demand, but not completely. This will see a slight
increase from the plateau in pricing we are seeing towards the end of this year.”
All in all, in 2023, Project Blue’s outlook is for a balanced market unless there are
unexpected supply-side shocks.

© 2023 51
Manganese Market Forecast: Top Trends

That Will Impact Manganese in 2023
Find out what experts had to say about trends in the manganese
market in 2022 and the 2023 manganese forecast.
After a strong demand rebound in 2021,

manganese faced a year of volatility as
the Russia-Ukraine war hit the sector.
Despite not being widely known,

manganese is extensively used in
metallurgy. In fact, it is the fourth most
common metal by tonnage, just after iron,
aluminum and copper. It also has growing applications in the battery sector.
With those factors in mind, what will happen to manganese in 2023? To find out,
the Investing News Network (INN) reached out to analysts in the space to get their
thoughts on what’s ahead for the battery metal.
How did manganese perform in 2022?

At the end of 2022, many analysts were predicting a recovery in manganese supply
and a price correction.
Looking back at how the market performed throughout the 12 month period, Clare
Hanna of CRU Group said Russia's invasion of Ukraine has had a significant effect
on the manganese market, both directly and indirectly.
“Ukraine has been a very significant supplier of manganese ferroalloys to Europe,

Turkey, the Middle East and North Africa,” she said. “Indirectly, the higher power
prices, especially in Europe, have affected both demand and supply of manganese
alloys, with reductions in both and broader slowing in the macroeconomy.”
© 2023 52
In the first half of 2022 there were also problems caused by bad weather and
COVID-19 restrictions in Australia.
“(These) occurred at the same time as Eramet (EPA:ERA) was having teething
problems with the shift to larger vessels for exporting ore from Gabon to China,”
Hanna said. Eramet is the world's second largest producer of manganese alloys. “In
combination, these had a dramatic effect on the market for high-grade manganese
ore in the first half of 2022.”
All in all, CRU was expecting manganese alloy prices to continue to correct in 2022
after the spike in 2021.
“This did actually happen in the second half of the year. However, outside of China,
in the first half of the year, ferroalloy prices rose sharply,” Hanna said. “Buyers were
very concerned about risks to continuity of supply immediately after the Russian
invasion of Ukraine and bought to cover potential shortfalls.”
Also last year, the resurgence of COVID-19 in China kept steel demand and
production relatively subdued, with manganese ore and alloy demand following the
same pattern.
“While ferroalloy prices rose to cover the increased costs of ore in the first half of
the year, they have fallen back since, and silicomanganese prices finished the year
7.5 percent lower than at the beginning of January,” Hanna said.
What factors will move the molybdenum market in 2023?

As the new year begins, there are several factors investors should keep in mind
when looking at the manganese space.
CRU is expecting steel production to be marginally higher in 2023, “but there is

unlikely to be much uplift until Q2,” Hanna said.
In 2023, the regions that are most likely to see stronger growth in demand are India
and the US, as new steelmaking capacity is scheduled to come online in both these
regions.
© 2023 53
“The new US steel output is likely to displace some import volumes,” Hanna said.
“As there is limited scope to increase US manganese alloy production, imports will
need to grow to support the increased crude steel production.”
About 90 percent of manganese is consumed in ferroalloys, while only around 10

percent is used for specialty products, including electrolytic manganese metal
(EMM) and manganese sulfite monohydrate (MSM).
High-purity EMM and MSM can be used in lithium-ion batteries, but even with the
increasing popularity of electric vehicles, the battery sector will remain a small
percentage of total manganese demand in 2023. It's important to note, however,
that while there may be plenty of manganese ore, capacity to produce the sulfate
required for batteries is needed. And although manganese costs less compared to
other battery cell materials, car manufacturers can't forget about the material
altogether.
“Just because it's a comparatively low cost in your total bill of materials, it doesn't
mean it isn't crucial to find it and source it securely,” Anna Fleming of Benchmark
Mineral Intelligence said during a keynote presentation at this year’s Benchmark
Week event. “We've only got two producers outside of China currently.”
As with other battery metals, China plays a key role, dominating the conversion of
ore to manganese sulfate.
To move away from their dependence on China, Europe and the US have been
taking steps to strengthen their own battery supply chains. Last year, the US
introduced the Inflation Reduction Act, part of which requires automakers to have
50 percent of critical minerals used in electric vehicle batteries come from North
America or US allies by 2024.
“This … also requires either the ore mining or processing to be done in a free-trade
partner country, which excludes the countries including the EU,” Hanna explained
to INN. “This is certainly influencing the speed and location of developments in the
manganese battery supply chain.”
Despite a few recent announcements, actual commissioning of commercial-scale

plants outside of China looks to be several years off, according to the CRU expert.
© 2023 54
“Although several of the potential new entrants to the market have plans for pilot
plants to produce material that can be trialed and approved by automotive supply
chain partners,” she said. “Further announcements are likely, but developments of
new large-scale capacity outside of China are not yet.”
One of the other aspects to keep in mind is that demand for manganese from the
battery sector is expected to evolve in the coming years with the introduction of
high-manganese cathodes, such as lithium-manganese-nickel oxide.
“What we're seeing for manganese is that a slight change in the cathode chemistry
will really move the needle a lot for demand,” Fleming said. Benchmark Mineral
Intelligence forecasts that demand from batteries will increase five-fold in the next
decade.
Looking at the overall market for manganese in 2023, supply and demand should
be broadly in balance, although there may be pinch points during the year,
according to CRU. The ferroalloy cutbacks that started in the last quarter of 2022 in
Europe are expected to continue into Q1 2023, and will in some cases be even
deeper.
“Depending on developments in the European energy market, we could see this

pattern repeated next winter, although producers are likely to have had more time
to plan and lay down stocks,” Hanna said. “Fortunately, this time around, steel
production was also cut in Q4 and is likely to remain low in Q1.”
Another factor to watch when it comes to manganese is further supply curbs as

seen in 2022.
“The invasion of Ukraine has led to major cuts in supply from a key producer and a
spike in prices. The high-grade ore price was driven up by problems in Australia and
Gabon. All these regions have the potential for further disruption,” Hanna said.
Manganese is mostly mined in South Africa, Gabon and Australia, with global
production reaching around 20 million tonnes in 2021.
In terms of elements that could impact the overall manganese market in the new
year, Hanna suggested keeping an eye on the Chinese economy as optimism is high
due to the removal of COVID-19 restrictions.
© 2023 55
“The recovery in China could be stronger than expected and even, although it is not
our base case, supported by a government stimulus package,” Hanna said. “This
could push up demand and prices for manganese ore and ferroalloys. “
However, an alternative scenario would be a more severe COVID-19 wave and the
reimposition of some restrictions, which could dampen demand, the expert added.
Don’t forget to follow us @INN_Resource for real-time updates!

© 2023 56
© 2023 57

Battery Metals Outlook Q1 2023

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The Battery Metals Market in 2023

Lithium Market 2022 Year-End Review

Pull quotes were provided by Investing News

Lithium prices remained at all-time highs

Lithium market in Q1: Price rally continues

Similarly, Benchmark Mineral Intelligence’s Jennings-Gray said the success of these

Lithium market in Q2: Bearish supply calls put pressure on stocks

Lithium market in Q3: Price momentum continues

Despite the macroeconomic headwinds, the Chinese domestic market appeared to

“Outside of China, there have been murmurs of weakening demand from

Looking forward to prices, Benchmark Mineral Intelligence was expecting little

Lithium market in Q4: Demand remains bright

Commenting on lithium demand during a panel at this year’s Benchmark Week,

“China is the center of cathode output … this year's lithium-iron-phosphate output

As of December 12, 2022, Benchmark Mineral Intelligence’s lithium index was up

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in

conducts. The opinions expressed in these interviews do not reflect the

Lithium Market Forecast: Top Trends That

Pull quotes were provided by Investing News

Lithium prices soared in 2021 on the

How did lithium perform in 2022?

When looking at how different lithium products performed, lithium carbonate

In China, carbonate is still at a premium to hydroxide, albeit only around 5,000

Graph showing price difference for lithium hydroxide over carbonate.

Graph via Fastmarkets.

What is the lithium supply and demand forecast for 2023?

Benchmark Mineral Intelligence expects lithium demand growth of around 40

What's the outlook for lithium prices in 2023?

“A supply response is already underway, with additional production coming from

As mentioned, her firm is expecting demand in 2023 to be notably higher than in

What factors will move the lithium market in 2023?

“However, with the downstream becoming increasingly switched on to the raw

In terms of trends to watch, Jennings-Gray will be keeping an eye on alternative

“The extent of success in regards to development of hard-rock assets in Jiangxi and

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in

Lithium Market Update: Q1 2023 in

Lithium has been under pressure in

But demand for the battery metal is

How did lithium prices perform in Q1?

Additionally, original equipment manufacturers (OEMs) have been discounting price

Lithium carbonate is widely used by lithium-iron-phosphate battery makers in

“Many Australian spodumene contracts are tied to indexes in seaborne Asia

“Hydroxide is a structurally smaller market, which means supply remained tighter

Lithium supply and demand dynamics in 2023

Following a strong end to 2022, Benchmark Mineral Intelligence was expecting EV

“If the current trend of steady month-on-month increases in EV demand continues

“Although inventory built up at different points in the supply chain — particularly

Meanwhile, Benchmark Mineral Intelligence is forecasting that the lithium

OEMs look for supply, M&A activity picking up

“Strong demand means we expect to see more activity in terms of downstream

What's ahead for the lithium market in 2023?

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in

Cobalt Market 2022 Year-End Review

Cobalt prices rallied in the first several

Despite this pullback in prices, governments

What happened in the cobalt market in 2022?

Cobalt market in Q1: Strong demand supports prices

“We now expect cobalt demand to be even stronger as EV sales continue to

Cobalt market in Q2: Price rally takes a pause

Cobalt market in Q3: Demand for electronics takes hit