By Heekyong Yang and Tom Daly Nov 27 (Reuters) - Prospects
By Heekyong Yang and Tom Daly
Nov 27 (Reuters) – Prospects of Tianqi Lithium Corp 002466.SZ insist they produce other suppliers to show to if the closely indebted Chinese language agency, which is dealing with an imminent mortgage reimbursement deadline, fails to safe the refinancing wanted to stave off a default.
Tianqi, one of many world’s prime makers of lithium chemical compounds utilized in electrical car (EV) batteries, on Tuesday repeated its warning that manufacturing may very well be severely impacted if it fails by the tip of this month to make a $1.9 billion reimbursement on a mortgage used to purchase a stake in Chile’s SQM in 2018.
The agency at the moment has a 12.9% share of the worldwide lithium chemical market, says Benchmark Mineral Intelligence analyst George Miller.
That places it third behind U.S.-based Albemarle Corp ALB.N and SQM SQMA.SN within the group of main international producers that would choose up the slack if Tianqi defaults on deliveries.
Requested if it may guarantee provide to clients from December, Tianqi declined to remark outdoors of alternate filings.
However its shoppers, which embrace South Korean battery makers LG Chem 051910.KS and SK Innovation 096770.KS, in addition to their compatriot EcoPro BM 247540.KQ and Sweden’s Northvolt, are hardly panicking.
“SK Innovation would not going face any provide points as the corporate has signed contracts with different suppliers,” a spokesperson mentioned, with out offering additional particulars.
Battery supplies producer EcoPro BM mentioned whereas there have been “operational points” at Tianqi’s Kwinana plant in Australia – the supposed supply of lithium hydroxide of their 4-1/2 yr contract – the provider was sending materials from China as a substitute.
Tianqi in March postponed commissioning of Kwinana’s 24,000 tonne-per-year first section, citing liquidity issues, after the coronavirus demand shock exacerbated lithium market oversupply that had already despatched costs plunging.
LG Chem declined to say if it was receiving provide from Kwinana this yr as deliberate, whereas Northvolt mentioned its take care of Tianqi, protecting 2020-25, continues to be energetic and it has a “multi-feed technique in place for all uncooked supplies”.
Even when Tianqi manages to keep away from default, Benchmark’s Miller nonetheless sees its market share slipping to 9% by 2025.
He expects a “vital effort to maintain Tianqi afloat” from China, particularly as the corporate is a key participant within the strategic lithium-ion battery sector and operates, with Albemarle, the large Greenbushes lithium mine in Australia.
With surging EV gross sales within the EU and China and “few near-term supply-side expansions to compensate, we forecast a forthcoming deficit in lithium provide”, he mentioned.
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Onerous-rock storyhttps://tmsnrt.rs/36b5m4Y
(Reporting by Heekyong Yang, Tom Daly and Johannes Hellstrom; Extra reporting by Min Zhang and Mai Nguyen; Modifying by Jan Harvey)
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