Ford confirmed the interruption of activities at the unit in a statement sent to Fastmarkets on Tuesday.
“We’re pausing work and limiting spending on construction on the Marshall project until we’re confident about our ability to competitively operate the plant,” Ford said.
According to the automaker, “there are a number of considerations” that lead to the halt but did not provide further details. “We’re not being specific about what they are. We haven’t made any final decision about the planned investment there,” Ford said.
Executives from United States-based lithium producers believe this decision will not be a big issue for the lithium market at the moment because Ford’s plant would only become operational in a couple of years.
“I think this announcement will have little impact on global lithium demand as this plant would likely not have been in operation until 2027 or later,” Austin Devaney, chief commercial officer at Piedmont Lithium, told Fastmarkets.
Simon Clarke, CEO at American Lithium, also showed no concern about an immediate possible impact on the lithium sector.
“We haven’t seen anything that would give us concern,” Clarke said, adding that he thinks Ford’s move is “purely a business decision”, amid the current global economic backdrop.
Clarke added, “The global economy definitely plays into it. China has not really bounced back from Covid and inventories [of lithium] there are quite high. In the US, the economy has held up remarkably well so far but it’s definitely slow.”
Clarke continued, “I think Ford is [taking] prudent steps as an operating company. It has made a lot of moves in terms of electric vehicle production and protecting critical minerals and is well positioned for the future. It is not demand destruction, it is demand deferral.”
Fastmarkets battery raw materials analyst Jordan Roberts agreed that the market will not suffer any big changes now.
“The consequence of the decision won’t impact the US battery industry much at all. There is well over 1,000 GWh of US battery gigafactory announcements,” Roberts said.
However, Roberts explained how Ford’s move could indirectly impact the market.
“The announcement doesn’t directly impact lithium consumption in the US because the Cathode Active Material (CAM) that is utilised in the battery cells may be imported. But indirectly, the planned capacity of the battery plant is 35GWh, which translates into roughly 18,000 tonnes of Lithium Carbonate Equivalent (LCE) demand,” Roberts said.
Roberts continued, “Focusing on Ford in particular, the company already has plans for 123 GWh of battery production capacity with joint venture partner SK innovation, albeit for NCM chemistries and not LFP. This may impact Ford’s envisaged deployment of LFP in base line models, but they could also supplement the gap with importing LFP cells.”
United Auto Workers strike
Ford has been the least affected of the Big Three Detroit automakers by the United Autoworkers strike due to “substantial progress” made in its most recent round of negotiations, according to a September 22 statement from UAW president Shawn Fain.
“As you know, we gave our Members Demands to [Ford, General Motors, and Stellantis] two months ago,” Fain said. “They wasted a whole month failing to respond. But there has been movement. In particular, we’ve made real progress at Ford. We’re not there yet, but I want you to see the direction that Ford is going, and what we think that means for our contract fight.”
Ford’s indicated progress includes enhanced profit sharing and wage-tier flattening. The union’s escalation of its “Stand Up Strike” added 5,600 new strikers at 38 locations owned by either GM or Stellantis. Ford was not included in the strike escalation, though its assembly plant workers in Wayne, Michigan, remain on strike, sources said.
The auto strike had been chipping away at US hot-rolled (HRC) prices since long before any workers hit the picket line. It remains unclear whether the baked-in expectations of price drops have been exceeded, some market participants told Fastmarkets.
On Monday September 25, Fastmarkets’ daily steel HRC index, fob mill US Midwest, was calculated at $32.75 per hundredweight ($650 per short ton), down by 2.88% from the previous calculation on September 22 and down 2.12% from a week prior.
This represents a yearly low, with the price last dipping below $33 per cwt on November 28 to $32.28 per cwt.
Some sources believe that HRC prices are nearing a bottom, however.
One tubular producer who purchases HRC for feedstock said there is a “strong sense” that HRC prices are bottoming, and that they “expect an increase once that [occurs].”
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