Iron ore weakness to continue into 2025 and beyond, says Fitch Solutions’ BMI
Looking beyond 2024-2025, BMI analysts maintained their view that iron ore prices will likely follow a multi-year downtrend.
A new report by Roskill states that the competition for controlling lithium-ion (li-ion) batteries production has intensified globally, with continuous announcements made regarding the build-out of new li-ion battery plants and/or capacity expansion. A case point is Nissan’s official confirmation in early July that Envision AESC will build a second, 9GWh-plant in the UK.
According to the market analyst, research shows the geographical distribution of li-ion battery cell manufacturing capacity remains Asia-centric and particularly China-focused. In fact, China is expected to account for over 58% of global capacity by 2030.
In parallel, Roskill data show that Chinese li-ion battery producers have been striving to expand their international client base, in addition to meeting domestic needs.
Europe, on the other hand, is aggressively building its own li-ion battery industry with government incentives and tougher emission regulations playing an important role in the EV sector’s rapid expansion.
“Roskill forecasts Europe’s share of global li-ion battery cell manufacturing capacity will increase from less than 6% in 2020 to 26% by 2030,” the report states.
In the firm’s view, North America is likely to join the race to build out li-ion battery cell manufacturing capacity but catching up would require effective collaboration between industry, investors and regulators.
Within this context, which is supported by strong demand for EV, consumer electronics and energy storage systems, Roskill foresees a strain on raw materials markets precipitating supply chain issues, particularly if investment in projects and expansions is not incentivized.
The report explains that such a possibility is what is pushing battery manufacturers to ensure raw materials supply for their cell production by actively participating in mining and mineral processing through co-developing and equity investment, as well as deepening their existing business relationships with long-term purchase agreements.
“In the midstream sector, companies like Guoxuan and EVE have established subsidiary factories to ensure the supply and quality of raw materials,” the review states.
In terms of market participants, Roskill holds that the main ones will continue to be leading producers over the period to 2030, particularly for automotive batteries. Its insights show that the top 10 companies are set to occupy almost 60% of the global EV/ESS li-ion battery market over the next decade.
“Roskill forecasted that some Tier 2 battery makers would boost their standing and reach Tier 1 status in the next two-five years by improving the quality and scale of Li-ion battery products and securing long-term purchasing contracts. The market has proceeded as Roskill expected; Envision AESC is a case in point, which recently announced to partner with Nissan and Renault to expand its manufacturing capacity in Europe,” the report reads.
Automakers making batteries, however, are not expected to enter the race any time soon.
The market analyst points out that a lot of complexity is involved in battery cells production, and it could be challenging for auto producers to start cell production from the scratch and build the expertise inside the company.
“Roskill believes partnering with a well-developed battery manufacturer is the best starting point for most automakers. In the long term, in-house battery production will enable automakers to own their supply chain, secure battery cell supply and have speed and cost competitiveness.”
