Alright folks, it's time to zoom in on what's going on with lithium and cobalt, key elements for our battery tech. It's been a roller coaster, so let's break it down.
First off, passenger plug-in electric vehicle (PEV) sales are experiencing a bit of a slump, dropping 11.3% month over month in top markets. China's sales aren't tumbling as hard as they used to, but they're still facing an uphill battle. Their economy's recovering, but it's like trying to run through molasses. This could hold back their auto sector's revival.
Meanwhile, Europe's auto sales are on the mend, but some obstacles like subsidy withdrawals are causing a bit of a hitch in their stride. Germany, France, and the UK are still lagging behind their pre-pandemic car sales, limiting the market size for PEVs.
The US, though, is flexing its muscles. PEV sales there rose by 4.8% in April, even though the country's overall car sales are dipping. But the good times might be short-lived. The US Senate passed a bill slashing clean energy incentives, which could potentially put a damper on the growth of the PEV and energy storage sectors.
Now let's shift gears and talk about lithium:
China's lithium price has had a bit of a rebound, jumping 67.1% in just under a month. This seems to reflect a bullish confidence in PEV sales and battery demand recovery.
However, there's a caveat. This price rally could be short-lived if the PEV sales don't solidify. If sales don't back up the price increase, we could be in for a bumpy ride with price volatility.
And what about cobalt?
Cobalt's not faring so well. Its price in China has been sliding for 14 months because of weak demand. This is in part due to PEV demand faltering and an increase in cobalt availability.
Cobalt prices are also getting dragged down by a rising supply of cobalt intermediate from the Democratic Republic of Congo. So, the cobalt outlook is a bit of a mixed bag right now.
This is what it looks like when industries are trying to find their footing in a shifting landscape. Despite the setbacks, major players are strategically investing to ensure they're ready to roll when the demand picks up again.
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