David Fuller and Eoin Treacy's Comment of the Day
Category - Technology

    EV makers' battery choices raise questions about future cobalt demand -

    This article from S&P Global Platts was written in November but includes some useful information about the outlook for battery chemistries. Here is a section:

    In May, Volkswagen acquired a stake in Chinese battery supplier Gotion-High Tech, one of the country's largest suppliers of LFP batteries. However, Volkswagen told Platts by e-mail that it currently does not plan to use LFP in its cars, although the company is "verifying that technology and its opportunities."

    Another German automaker, BMW, recently expanded its battery plant in Tiexi, China, but reportedly to produce nickel-cobalt-manganese (NCM) batteries for the iX3 model. The company's primary goal at the moment is to increase driving range, but lowering costs will be a priority in the future, BMW told Platts by e-mail.

    "In this conflict of objectives between range and cost, it is more important than ever to completely penetrate all actuators, starting with raw materials, cell chemistry, cell and module construction, and optimizing their entire interactions," BMW said, without dismissing any specific kind of cathode chemistry.

    Some western market participants still argue that LFP should be restricted in the future to Chinese low-range city cars, as well as energy storage systems. Most of the investment is still flowing into NCM technology, which will maintain cobalt's relevance, sources said.

    Even Tesla, despite committing to completely move away from cobalt and employing LFP in its Chinese-made Model 3 Standard Range, still uses NCM 811 (8 parts nickel, 1 part each cobalt and manganese), supplied by LG Chem, in the Model 3 Long Range version produced in Shanghai.

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    As Polar Vortex Stirs, Deep Freeze Threatens U.S. and Europe

    This article by Brian K. Sullivan for Bloomberg may be of interest to subscribers. Here is a section:

    Technically, the polar vortex refers to a band of winds that encircle the Arctic and keep the cold locked far to the North. But with that temperature spike, known as sudden stratospheric warming, the band can buckle, allowing frigid air to head south. Gas traders used to call it the “polar pig.”

    That could mean chills anywhere in the Northern Hemisphere, though this year it’s likely to end up in the U.S. according to Ryan Truchelut, president of Weather Tiger LCC. A wave of deep cold could give the Great Lakes and East Coast their first real blast of frigid winter weather, along with a storm pattern that delivers snow storms as well.

    It will be a big shift for the U.S., where winter has been a bit lackluster so far. In New York, January readings have been 5.1 degrees above normal through Thursday, and Chicago has been 7.2 degrees warmer for the month.

    Still, there’s no guarantee it will happen. While a sudden stratospheric warming usually leads to a burst of frigid weather, sometimes the clockwork of gears in the atmosphere doesn’t deliver.

    “Many times in the past, the forecast for a cold weather event across the country resulted in a false alarm,” said Jim Rouiller, lead meteorologist with the Energy Weather Group LLC.

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    Cryptocurrency market cap tops $1 trillion with bitcoin above $37,000

    This note from MarketWatch may be of interest to subscribers.

    The market capitalization of all cryptocurrencies topped over $1 trillion for the first time, according to data from Coindesk. That came as bitcoin BTCUSD, 9.15% topped $37,000, trading up nearly 4% to $37,152. Cryptocurrencies have surged, helped by a move in the autumn by PayPal to allow transactions through their service.

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    Email of the day - on US COVID cases

    As a result of the violent rioting in Washington yesterday, by thousands of people under huge stress, a super-spreader event has almost certainly been generated. I note the daily tally of deaths yesterday in the US exceeded 4000. Not good!

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    December Research Letter

    Thanks to a subscriber for this report from Crescat Capital which contains a number of interesting charts. Here is a section:

    Contributing to the supply shortage, the number of major new gold discoveries by year, i.e., greater than 2 million Troy ounces, has been in a declining secular trend for 30 years including the cyclical boost between 2000 and 2007. At Crescat, we have been building an activist portfolio of gold and silver mining exploration companies that we believe will kick off a new cyclical surge in discoveries over the next several years from today’s depressed levels.

    Gold mining exploration expense industrywide, down sharply since 2012, has been one of the issues adding to the supply problems today. Crescat is providing capital to the industry to help reverse this trend.

    Since 2012, there has also been a declining trend of capital expenditures toward developing new mines. From a macro standpoint, gold prices are likely to be supported by this lack of past investment until these trends are dramatically reversed over the next several years. Credit availability for gold and silver mining companies completely dried up over the last decade. Companies were forced to buckle up and apply strict capital controls to financially survive during that period. Investors demanded significant reductions in debt and equity issuances while miners had to effectively tighten up operational costs, cut back investment, and prioritize the quality of their balance sheet assets.

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    Email of the day on rising inflationary pressures and Ethereum

    I hope you are enjoying the holidays and looking forward to a better year next year.

    Here’s another one of Charles Gave's excellent articles-the oil price is on the move thus starting to bear out his fear of a 1970s-type repeat.

    Secondly, regarding Ethereum, have you been able to quantify any price target and if so, what technical data/events have you chosen to use?

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    Email of the day - on hydrogen ETFs

    Hope you have a good Xmas. Could I ask, are you aware of an ETF in which I can get exposure to Hydrogen. I live in the UK, as such, I may be restricted with my choice?

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    Lidar Makers Jump After Report on Apple's Autonomous Car Plans

    This article by Divya Balji and Crystal Kim for Bloomberg may be of interest to subscribers. Here it is in full:

    Some lidar suppliers gained Tuesday after Reuters reported that Apple Inc. plans to build a self-driving car for consumers and is tapping outside partners for elements of the system as it develops its own battery technology.

    Apple is approaching companies for some parts, including lidar sensors that provide autonomous cars with a real-time, 3-D view of the world, the report said, citing unidentified people familiar with the matter.

    Lidar supplier Luminar Technologies Inc. rose as much as 12% on Tuesday, while Velodyne Lidar Inc. surged 16%. Blank-check firms that are bringing more lidar players to the market also advanced: InterPrivate Acquisition Corp. climbed 17%, while Collective Growth Corp. jumped as much as 24%.

    Apple has been working on driverless car technology since 2014, but pared back its ambitions from a full-fledged vehicle in 2017, Bloomberg News has reported. Since then, Apple has been working on the underlying autonomous system. The company has been deciding whether to attach this system to its own car, or existing vehicles, or to partner with an established carmaker, Bloomberg News reported earlier this month.

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    How Chinese Chip Giant SMIC Can Evade Trump's Newest Crackdown

    This article from Bloomberg news may be of interest to subscribers. Here is a section:

    Within the company, engineers are scrambling to assess the fallout and figure out workarounds to secure the equipment it needs, much like Huawei did two years prior, another person familiar with the matter said. At issue is the administration’s focus on drawing a line at 10-nanometer technology, banning the sale of equipment intended for use in more advanced processes. SMIC could conceivably repurpose 80% of older-generation gear to crank out more advanced chips, but that tactic won’t sustain production for the longer term and much depends on how far President-elect Joe Biden decides to take the rules, a third person close to the situation said, asking not to be identified discussing sensitive matters.

    “The company has already got critical equipment and materials needed to continue production,” said Xiang Ligang, Beijing-based director-general of the Information Consumption Alliance. “In the past, China wasn’t too sensitive about the technological bottlenecks it has. But now, Beijing is fully aware of the potential damage and is determined to solve these issues.”

    Chinese government-backed SMIC, a manufacturer of chips for global names from Qualcomm Inc. to Broadcom Inc., relies on U.S. gear for its longer-term technology road map. While its engineers may be able to sustain research and output in the short run, the latest sanctions basically freeze its capabilities while the industry advances. If a Biden White House takes it to the max, SMIC could be blocked from 7nm or more advanced technology while overseas rivals like Taiwan Semiconductor Manufacturing Co. dominate the market. The heightened scrutiny may also discourage clients leery of dealing with the uncertainty.

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