Buyers ready to dig deep for world’s miners
I think there’s a good chance this will end in tears. Yes, yes, EV, the electric world, lots of metals needed. So, buy into that limited stock that will definitely rise in price, right?
There are four major areas here. Copper, cobalt, lithium and rare earths. Market prices of the last three are all below production costs (for many, at least) right now. The fourth, copper, well, might be a real shortage but I’m really not sure.
I tend to think – note this is not investment advice, this is just me having a thought – that the people running the miners are believing a bit too much of the hype. There’s a battle gong on in Oz to be the buyer of a really bit potential Li mine between billionaires. And yet at the same time there’s a brand new mine not operating because of low prices. Just doesn’t seem sensible to me.
I fear people are buying at the top…..
My mining stocks have shot up recently from being in some serious doldrums over the last year.
I think that there’s a way upwards still.
There’s an old stock market saw. “Up on anticipation, down on realisation”. There’s always a certain amount of herd behaviour in markets. Rising prices encourage rising prices as latecomers join in not wanting to miss the bus. Good news is cherry picked. Eventually, of course, reality pushes its way to the front & the cautious begin reappraising the situation. The bad news starts taking over & you’re into a different ballgame.
The trick of being a trader is being a predator on the herd not a member. Reading that inflection point before it happens. Because it always does. The fascinating thing is none of the information will have changed. It was always out there if you cared to look. It’s the way people look at it changes.
Sodium ion batteries are finally coming out of the lab and into production, so that’s going to hit lithium miners, cobalt free electrodes are getting to be more common which will hit cobalt mining and there’s some nice work being done on RE free high strength magnets. That only leaves copper and I’ve no idea how much of that get recycled at present.
I think you’re probably gonna be proved right, Tim, because the whole Net Zero project is proving unimplementable (barring some sort of Khmer Rouge type disaster in Western countries, which is still possible but still won’t overcome the laws of physics).
You’ve always been good at reading the room. What do the tea leaves of globalised farmers and truckers’ protests, the crisis of legitimacy nearly every major established Western political party faces, rising public anger over worsening living conditions and bankrupt public services, and the world splitting into two mutually hostile blocs that are actively arming for war against each other read for the plan to get everyone driving leccy cars within a few years?
I reckon we’ll see a lot more burning cars in future instead. Fun thing about EVs, when the annual North African riots happen in Paris, the fires will be impossible to put out. EVs are incompatible with a low trust society, unless you don’t mind your charger cable (£200) being stolen on the regular.
Sorry, I didn’t vote for any of this either.
As I remember it, everyone was cheering the great Aussie lithium boom to come when the evil Chinkies wickedly subsidised a huge new mine in Indonesia.
And the latest article I’ve read on how we’re meeting our CO2 reduction targets (yes, really!!) was by stopping the farmers from clearing their land and calculating that this means they’re absorbing umpty trillion tons of carbon. (Yes it sounds like bullshit to me too.)
But of course I agree with Steve’s opinion about Net Zero and alas the state of politics as well.
So lots of doom and gloom to come.
The EV bubble seems to be bursting as it is gradually dawning on people how impractical they are. The limited range would be less of a problem if you could charge up in seconds as you can in an ICE vehicle but you can’t. You can write one off by having a minor bump. Even with huge government subsidies the depreciation is horrendous. They occasionally spontaneously combust and the resulting fire is almost impossible to extinguish. Those last two points means that insurance is hugely expensive. The range diminishes as the batteries age and is also reduced by cold weather. Oh, and one of their main selling points is that they are good for the environment and they aren’t. I would have thought that all this would have an effect on prices of the raw materials used for making them.
They seem to think that the range anxiety issue can be solved by fast chargers. However a fast charger needs a fat mains feed and we all know how the current grid isn’t geared for that. Also a fast charge knackers the battery – a combination of temperature and electrode effects from the current density.
Bboy – Sadly, yarp.
SG – yeah, EV sales are slowing in China too. The canary in the lithium mine, perhaps.
I thought this was interesting:
Former US president Donald Trump stirred a controversy a few days ago when he said in a campaign speech that he would impose a 100% tariff on cars built in Mexico by Chinese companies for sale in the American market. He said there will be a bloodbath in the American auto market if doesn’t win in the November election.“Now if I don’t get elected, it’s going to be a bloodbath for the whole — that’s going to be the least of it,” he said, adding: “But they’re not going to sell those cars.”
Trump is fully aligned with the mainstream of American establishment opinion on the subject of Chinese cars, it doesn’t matter who is allowed to win the next US presidential election – the Chinese are not going to be permitted to undercut American auto manufacturers.
But that comes back to what sort of relationship the West thinks it can have with the world’s greatest manufacturing power. Increasingly, it’s an antagonistic one. Sanctions are a prelude to war.
In only a few years, the United States government has gone from being the world’s biggest cheerleader for global free trade, to deliberately cutting itself and allies off from cheap imports from Eurasia. Remarkable.
Do you not think that when the milk float bubble properly bursts, when tossler and all the other collective subsidy farms go tits that the price of lithium might actually fall off a cliff?
After all, there will be huge stocks of incendiaries lying around with nowhere to go. That’s probably lithium to cover actual sensible demand (e.g. phone batteries) until the last proton decays!
I can see China can make stuff, but I can’t see how anyone can be made to buy it. Not enough to have a hot war over.
BUT, we’ll need the lithium for the drones.
Steve,
“In only a few years, the United States government has gone from being the world’s biggest cheerleader for global free trade, to deliberately cutting itself and allies off from cheap imports from Eurasia. Remarkable.”
The US government was only in favour of global free trade when it was hitting the people they didn’t care about. Cletus in Bumfuck, Idaho loses his job as it goes to China? Who cares. The USA is actually not a particularly global free trade country. It’s free trade within the USA but if you look at how it behaves with all sorts of goods and services it’s very protectionist.
You start hitting the auto workers who pay their union dues which funnel their way into Democratic Party coffers, well, now, Chinese cars are a threat to US national security. The Chinese government are going to be taking the photos from the cars of Moms stopping at Target for their shopping and *somehow* using that data to destroy America. So, they have to be banned.
Or look at Tiktok. *Somehow* videos of kids doing skateboard tricks undermines US democracy. In truth, this is that they just don’t like Tiktok beating Google or Facebook.
And I’m pretty sure that the ban on Nvidia chips to China is the same. It’s about trying to stop Alibaba Cloud and others from competing with Microsoft and Amazon.
Of course, you say “national security” to the average member of the public and they just roll over.
I don’t think there’s going to be a war though. China will just evolve around it. The ban on AI chips has led to a lot of nervousness in China. Chinese government and companies have realised that the USA could just cut them off from chips, from software, from services. So, there’s a lot of investment happening now to prevent that, like companies making RISC-V chips, like the Chinese government announcing that they want to replace Windows/Intel PCs with Linux. Because they can maintain all of that. Now what happens if Chinese companies make a Linux derivative, applications, related services that are better or even just fit certain niches better? The AI chip ban that helped one set of companies ends up hitting Dell or HP instead.
It’s why anti-free trade doesn’t really work. The only beneficiaries are some special interests in your country. Everyone else, from consumers, to other industries, suffers.
It’s why anti-free trade doesn’t really work. The only beneficiaries are some special interests in your country.
You can turn that round the other way. Free trade doesn’t work because it’s never a level playing field, Everyone else, from consumers, to other industries, suffers.
Also a fast charge knackers the battery – a combination of temperature and electrode effects from the current density.
True dat. Tesla (and, no doubt , other manufacturers) keep track of when you make use of fast chargers, and if you do it too often, they’ll slow you down to a trickle charge, because they’re on the hook if the battery goes tits-up (within the warranty period). This mainly affects the travelling salesman crowd.
I gather that in American retirement villages people pootle about in golf buggies, which are EVs. That sounds like a pretty good niche for them.
A young couple in my extended family have bought one so they can take the toddlers and their clutter to the beach.
It’s hard to see a mighty international business being based on these niches. As someone said, it’s weapons of war where there will be money to be made.
WB – And I’m pretty sure that the ban on Nvidia chips to China is the same. It’s about trying to stop Alibaba Cloud and others from competing with Microsoft and Amazon.
So much hype over AI, but I’m not convinced AI is the Next Big Thing they think it is. Maybe my old school 90’s template computer science brain just doesn’t get it (I didn’t get Bitcoin either) but we’ll see.
It’s surely disruptive tech to some degree in some use cases, but I wouldn’t worry about my GP being replaced by ChatGPT anytime soon. Although you’d easily spot the fake robot GP’s by their consistent willingness to engage with patients.
It does have some obvs disturbing use cases in warfare. But maybe one of the killbots will escape their Indian tech wallahs after being struck struck by lightning, team up with Ally Sheedy, wear a delightful cowboy hat, and decide that killing is bad.
It’s why anti-free trade doesn’t really work. The only beneficiaries are some special interests in your country. Everyone else, from consumers, to other industries, suffers
Yarp. If the Sino-Russian Greater Co-Prosperity Sphere has cheap energy, plentiful resources, plenty of cheap labour, and can continue growing their economies while the West continues to chain itself, Terry Waite style, to the rusty cold radiator of Net Zero, it’s hard to see how “we” can “win” against the Eurasians in any future conflict or in general.
They’re already building gleaming skyscrapers, while we’re building tent cities for economically inert migrants.
I would like us to continue being a land of plenty, but the government wants to make growing food and most other forms of economic activity unaffordable or illegal, for fear of ManBearPig. We can’t both get what we want.
Troubling.
Rhoda – BUT, we’ll need the lithium for the drones.
And for mental health.
>”bloke in spain
May 4, 2024 at 5:05 pm
Everyone else, from consumers, to other industries, suffers.”
1. How does my buying something from China hurt you?
2. Consumers are the one buying from China.
3. ‘other industries’ – people who want me to be forced to buy from them so they don’t have to be competitive.
I am sympathetic to the idea that trade controls are necessary for national security – but no one is *entitled* to my money, even if they live in the same country as me.
@Agamemnon: you forgot the other bit of BiS’s statement: ‘Free trade doesn’t work because it’s never a level playing field”
Thats why it hurts me (or him), as it hurts the producers (and their employees) based in the UK. If you buy a dozen eggs that are produced outside the UK they will almost certainly have come from a battery farm, something that is banned in the UK. You are benefitting from something (getting cheaper eggs) that is not legal in the UK. Thats not ‘free trade’, because one party who wants to sell you eggs is restricted in how it can operate, while the other isn’t.
IMO all imports (of anything) should have to conform to production methods and techniques that would be allowable in the UK. If not, can’t come in. Then the UK consumer would pay the true cost of its voting for more regulations. As it is they get to vote for the ‘feelz’ here in the UK, but benefit from the very things they purport not to want happening abroad. Thats just rank hypocrisy.
In my experience most have no clue about regulations and how much the state and Quangos create unless it directly applies to something they obviously and consciously buy, like food and even then they buy low welfare but vote high welfare.
Most people can’t do abstract thought very well.
“As it is they get to vote for the ‘feelz’ here in the UK, but benefit from the very things they purport not to want happening abroad. Thats just rank hypocrisy.”
This is the CO2 emissions cause climate change bollocks in a nutshell. Cheering on the economic suicide that is Net Zero while pretending that Chinese CO2 emissions somehow don’t count.
‘This is the CO2 emissions cause climate change bollocks in a nutshell.’
Yeah Stonyground. Pisses me off too.
Jim said:
“As it is they get to vote for the ‘feelz’ here in the UK, but benefit from the very things they purport not to want happening abroad. Thats just rank hypocrisy.”
I’m surreal there is some hypocrisy (this is England), but isn’t it mostly that the ones voting for higher welfare and the ones buying cheap imported stuff are different people?
Most voters don’t care about the animal welfare stuff, it’s activists who are getting it into party manifestos. Half the time there isn’t much difference between the parties, but even when there is, for most people it isn’t a big enough issue to affect their vote.
“I’m surreal there is some hypocrisy (this is England), but isn’t it mostly that the ones voting for higher welfare and the ones buying cheap imported stuff are different people?”
That doesn’t really matter, because everyone benefits from the hypocrisy, whether they vote for it or not, or don’t vote at all. At the moment the voting classes (middle classes, and elderly mainly) can vote for this stuff, knowing a) they won’t pay any more as a result and b) the non-voting classes (working classes, underclass, the young) will also benefit, so won’t be driven out to vote against it, and will continue in their bread and circuses induced stupor.
As Stonyground points out its not just regulation of UK production that the process above allows to continue, its all the Net Zero crap as well. If Net Zero meant you could only have a big screen TV that was made in the UK under UK law, or from a similar high regulation society at a price that entailed then Net Zero would die at the next election.
Nut Zero will die when the lights start going out, whether it’s next winter or the one after that.