NEW YORK, May 23, 2017 /PRNewswire/ --
A report by Platts, a division of S&P Global, indicates that rechargeable battery demand will continue to drive the lithium and cobalt markets for years to come. Edward Lauer, the head of portfolio optimization at Eurasian Resources Group stated, "Long-term strong battery demand is very real... Even if demand from commercial and residential battery storage doesn't materialize to the same extent, consumer electronics and electric vehicle industries will only continue to grow." The price of battery production is also expected to fall as technologies improve. Lithium-ion battery production costs averaged around $240/kWh in 2016, according to Andrew Grant of Bloomberg New Energy Finance, down from $350 a year earlier. Scientific Metals Corp. (OTC: SCTFF) (TSX-V: STM), Tesla Inc. (NASDAQ: TSLA), Panasonic Corp. (OTC: PCRFY), Sociedad Quimica y Minera de Chile (NYSE: SQM), Albemarle Corporation (NYSE: ALB).
As for total market projections, a research by Markets and Markets estimates that the lithium ion battery market is expected to be valued at USD 68.97 Billion by 2022, growing at a CAGR of 16.6% between 2016 and 2022. The growth of this market is propelled by the increase in demand for electric vehicle, strict government mandates on fuel economy, growing demand for smart devices and other consumer electronics, and development toward enhancement of lithium ion batteries. The lithium cobalt oxide (LCO) battery type is expected to hold the largest share of the overall lithium ion battery market in 2016 and the market for lithium nickel manganese cobalt battery type is expected to grow at the highest rate between 2016 and 2022.
Scientific Metals Corp. (OTCQB: SCTFF) (TSX-V: STM) on May 18th announced, "It has completed the non-brokered private placement of units (each, a "Unit") previously announced on May 17, 2017. The Company issued a total of 2,000,000 Units at a price of $0.85 per unit for gross proceeds of $1,700,000... A director and officer of the Company participated in the private placement and acquired a total of 970,000 units. All of the securities issued under the private placement are subject to a four month resale restriction. The private placement remains subject to the final approval of the TSX Venture Exchange."
Wayne Tisdale, CEO of the Company states, "We are pleased to close this institutional round of funding, and are delighted to add new investors into our company ranging from Europe to the United States of America, as well as management participation. We feel strongly that this round of funding puts STM in a healthy position to execute on our business plan. The cobalt market has come under intense pressure with rising prices cresting 5 year highs coupled with supply constraints out of the Democratic Republic of Congo. We are very pleased to move forward with our home grown project in hopes that we can be a leader in the move towards a safe ethical solution. We would like to thank our shareholders old and new for their commitment in our vision."
The Company intends to use the net proceeds of this private placement for the phase 1 exploration program at its flagship Iron Creek cobalt property in Idaho, and for general working capital purposes.
Tesla Inc. (NASDAQ: TSLA) earlier in January announced on their official blog that together with Panasonic Corp. (OTC: PCRFY) the companies started mass production of lithium-ion battery cells, which will be used in Tesla's energy storage products and the Model 3. According to the blog, "With the Gigafactory online and ramping up production, our cost of battery cells will significantly decline due to increasing automation and process design to enhance yield, lowered capital investment per Wh of production, the simple optimization of locating most manufacturing processes under one roof, and economies of scale. By bringing down the cost of batteries, we can make our products available to more and more people, allowing us to make the biggest possible impact on transitioning the world to sustainable energy." Tesla is using a high-energy lithium-ion NCA (nickel, cobalt, aluminum) battery for its new grid battery.
Sociedad Quimica y Minera de Chile (NYSE: SQM) has a global presence in a wide variety of industries and applications through its five business lines: Specialty Plant Nutrition, Iodine and derivatives, Lithium and derivatives, Industrial Chemicals and Potassium. On May 17th the company reported earnings for the 1st quarter 2017, in which Chief Executive Officer, Patricio de Solminihac, stated, "So far in 2017, we have seen stronger lithium demand growth than we previously expected, and now estimate that demand growth should reach approximately 14% this year. Under this new scenario, we believe that for the rest of the year the market could remain tight. To meet this growing demand, and to take advantage of strong prices in the lithium market, we have decided to expand of our lithium carbonate capacity in Chile from 48,000 to 63,000 MT/year. We estimate that this expansion will be completed during the second half of 2018, and will require approximately US$50 million of capital expenditure."
Albemarle Corporation (NYSE: ALB) is a global developer, manufacturer and marketer of highly-engineered specialty chemicals. The Company operates through three segments: Lithium and Advanced Materials, Bromine Specialties and Refining Solutions. In the most recent quarterly earnings report Luke Kissam, Albemarle's Chairman, President and CEO commented, "Our first quarter results clearly demonstrate the increased growth profile of Albemarle following the changes to our business portfolio over the last few years... Excluding currency exchange impacts and divested businesses, both revenue and adjusted EBITDA grew by double digits, 15% and 14%, respectively, compared to first quarter 2016. Our industry-leading Lithium business lead that growth, with an adjusted EBITDA increase of 56%."
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