Global Lithium Shortage
Over a month ago, Auquan flagged how the market has potentially underestimated the lithium supply/demand imbalance. Lithium-ion battery and EV manufacturers supply chains' are exposed to raw material shortages, with the outlook set to worsen as investments in downstream EV factories and battery plants are outstripping investments in upstream lithium mining.
Recent research from Benchmark Mineral Intelligence has now called out Goldman Sachs' prediction of “significant” new lithium supply coming from China, where companies have invested in new hard rock and brine projects. When digging deeper, it’s unlikely that an unprecedented rampup of marginal, unconventional feedstock will fill the deficit, and unlikely demand will weaken.
- 17 June: Lithium shortages: threat or opportunity?
- 9 June: Here's what Goldman got wrong about lithium prices
- 1 June: Battery Metals Watch: The End of the Beginning
- 24 May: Lithium mine investments aren't keeping up with the EV supply chain
- 23 May: One Mine Auction Draws 3,448 Bids Amid Scramble For Lithium
- 23 May: The battle for lithium: A Chinese mine just sold for 596 times the opening price
- 4 May: Will looming lithium shortage undermine EV revolution?
Stellantis US Layoffs
The world's fourth largest automaker will begin an indefinite layoff starting next week at it's Sterling Stamping plant - the largest stamping plant in the world. With 2,184 employees, including about 2,000 hourly workers - a letter posted on the Facebook page of United Auto Workers Local 1264, said that the "indefinite layoff will be from the bottom up," starting as early as June 20. This has potential disruptions to an already impacted auto supply chain with component shortages.
- 15 June: Stellantis plans layoffs at Sterling Heights stamping plant in U.S.
- 15 June: Stellantis confirms layoffs at Sterling Heights stamping plant
WTO E-commerce Tariffs Discussion
Global technology firms are pressing the World Trade Organization to exempt data flows from cross-border tariffs. These digital duties are threatening higher consumer prices, examples include cross-border Amazon purchases, Netflix movies, Apple music and Sony PlayStation, with companies saying a failure to do so would undermine a global recovery already threatened by spiralling prices.
- 16 June: WTO provisionally agrees to extend e-commerce tariff moratorium: Sources
- 15 June: WTO to discuss tariffs on $26.7tn global e-commerce market
- 15 June: Global tech on edge as WTO weighs e-commerce tariffs
Sainsbury Living Wage Proposals
Depending if the wage rise proposals are approved by leading investors (HSBC, Legal & General Investment Management and Fidelity International are part of the coalition), Sainsbury’s may either look to offset these costs- axing certain operations in favor of outsourcing, however with an upper limit to this could struggle on their focus on driving prices lower to be competitive, with further pressure to pass these cost implications on to consumers.
We may see industry wide further price hikes, further accelerating the already high inflation and a further spiraling the cost of living crisis in the UK, which has implications on many other industries.
- 14 June: Supermarket wages ranked after Tesco, Asda, Morrisons and Aldi salary rises
- 6 June: Sainsbury’s CEO’s pay triples to £3.8m as firm rejects living wage calls
- 6 June: UK's Sainsbury's faces investor vote on workers pay amid cost of living crisis
- 20 May: Sainsbury Urges Investors to Reject Proposal Demanding ‘Living Wage’ Resolution
Rising Themes to Watch Out
ArcelorMittal Mexico Workers Strike
Continuation of last week's Stellantis Mexico Labor Rights Probe, which followed Panasonic's.
- 16 June: Mexico union strikes at ArcelorMittal plant over profit-sharing
- 16 June: Miners break out strike at the Arcelor Mittal company
Air France Pilot Strike
Exacerbating the already trending aviation staff shortages and travel chaos.
- 16 June: Air France Pilot Strike: Union Calls for One-Day Walkout
- 16 June: Air France expects no disruption from June 25 pilot union strike
India Cotton Price Hikes
Increased cotton prices will put a stress on the working capital and liquidity of small-sized cotton yarn spinners. This, along with fuel prices straining RMG exporters, is squeezing margins for Asian apparel makers while their global retail customers are reluctant to soak up the extra costs.