General: Share Price, Trades and Chart Related Discussions, page-70

Alright thanks for the heads up.
This is truly pathetic lithium analysis.

For starters. He mentions Rockwood as a member of the Big 4.
Rockwood was bought out by Albemarle ages ago. Same mistake was repeated in both articles.
Its basically the same stuff as Macquarie. Very poor research.
No mention of Tianqi or Ganfeng. Deutsche Bank have since updated their reports but their first efforts were reasonably sloppy too with a lot of mistakes in production figures - but at least it was the first major attempt at analysis.
They are still the only ones to have actually gone to China and talked to people there.

Take this statement.
His pricing models suggest a realistic long-term average price for the metal is in the range of $6,000 to $7,000 a ton, with high-grade battery material perhaps fetching more like $10,000 a ton. “But for the market overall, we’re not looking at a long-term $20,000-a-ton price,” he says.

What the hell is this guy talking about? This is nonsensical.
When is this "long-term" going to happen?
You know the movie "Deer Hunter"? He needs a slap around the face and a dose of the "This is this" scene.



The new demand is for battery grade lithium. That is all that matters. There is no other kind that we are interested in.
Lithium for concrete production is suddenly important?
All that matters to us is Battery Grade.
Orocobre basically invented the term "industrial grade" to make up for their poor chemistry.

Yeah - who needs $20k/t ?
I have never modelled Galaxy profits on those figures.
Joe Lowry is projecting pricing between $12k-14k for carbonate next year. $16k-$21k for hydroxide. All in USD.
I think these are the best estimates we have.
They are even higher than the ones I conservatively model.

If someone can see what is happening in 2025 I think they're being pretty fanciful, and for them to simply tot up all the promised production targets on the ASX is just lame.

Let's focus on the here and now.

We also know that at our currently contracted $600/t that Galaxy's spodumene cost the converter $4800USD to make 1 ton of carbonate or hydroxide. Plus their costs - which are harder to quantify ( it depends on the converter and the product - ballpark $3k/t) but its is already clear that there is enough profit margin on $12-14k carbonate to justify Galaxy getting a much bigger chunk of the resulting carbonate pricing.

Tell these independent converters that there is an over-supply situation and they'll fall on the floor laughing. or crying.
They also have clients who are desperate for their product.
In a sense - this whole "price of lithium" thing is a pile of crap. There is no standard global price.

Buying lithium for the next few years is like buying drugs on the street. You have to know someone and if they have some, and you need it - then it's always the seller's price. The lithium market is the same. There are large contract prices and there are spot prices and a confusing combination of the 2 when you are dealing with small clients and small shipments.
Look at ORE. Every shipment is at a different price. There are several reasons for that in their case, but you only need to extrapolate that out to realise that it takes a guy like Joe Lowry to adequately judge what is being said and what is being paid.

SQM are not producing for sub $2.5k - and we already know how these figures are coming up from our own DFS. It may be a minor point but SQM's expansion into Argentina will also incur the exact same situation as Galaxy, where the reduction of the peso hasn't meant a big production cost improvement - instead chemical suppliers just upped their prices rather than passing along any savings.

The expansion that is coming from the big boys will not impact supply for a few years' time. This is all well and good for Galaxy. The time frame that they are using to set up their new supply plans is the same that Galaxy is using for SDV.
SDV will compete like-for-like against other brine suppliers and, from then on have the competitive advantage over other ASX hard-rock onl stocks with low cost production.
It may even make it even more attractive a take-over target as soon as the test plant is running and proving why Joe Lowry was so excited about SDV's resource.

Joe Lowry is showing a near capacity usage of the product across his future estimates. Certainly nothing to support there being twice as much as required. You only have to take a look at all the delays going on.

We know that a new mine may take 18 months from the perfect scenario of precise mine build execution and commissioning to shipment. But how many questionable production target dates and figures have been baked into the over-supply figures?

None of this build work has started yet on any other lithium mine. They are still drilling and talking.
No new brine has come online this year. Galaxy and LAC have the best new resources.
And they are the best because they present the best chemistry. Best chemistry = cheaper production costs.

Hell no new lithium production of any kind has come online this year.
IF this was so easy to do - where the hell is it? All the money in the world does not seem to be able to make this "common" metal into something that is quickly available for the battery plants.

These over-supply articles attempt to go so far and then get lost in the unknowable abstraction of how many miners and producers will succeed in arriving at production and ramping up from a standing start, without, in almost all cases, any prior experience in lithium production. At all. The sector is full of freshly born "babes in the woods".

The entire thrust of these 2 articles hinges on the success of "new techniques". It seems to paint the picture that there is any proof at all that these techniques are operating at anything other than lab level. POSCO is a massive Korean company and have thrown hundreds of millions at this for 5 years and still have nothing to show for it. They can do this as a speculative roll of the dice for a tax write off. Again... if this is so easy to do.. where is the new supply?

Same here with supposedly new ground-breaking spodumene/lepidolite processing techniques.
Where are the test plants to prove this up?
The PLS/LIT project is supposedly going to come online after PLS has built their mine - and PLS are going to fund this. Yeah. mmm. Anybody else see the possibility of that dragging on for a wee bit longer than a few years?

Joe Lowry is forecasting north of 300kt demand by 2020.

Once again - Galaxy has clients and contracts.
You know those graphs where they show supply and demand?
Galaxy is bedded right down in that graph. We're not the bit at the top that gets blown off like foam on a beer.
That is for the companies that begin building next year and the ones after.
They're the ones who have to wonder if they may face reduced shipment sizes or faltering offtake deals. Or none at all.

Galaxy contracts are with the independent spodumene producers and we are early enough to market that they are relying on us to save their bacon - which are approximately a dozen or so $200m plants that are currently starved of spodumene and relying on processing lepidolite and whatever stock is hanging around in stockpiles or the spot market from when Greenbushes still were supplying them. Now they are not. Our clients are hungry.

This over-supply thing is going to keep coming up because its just such a nice back-slap moment for those who missed the train at the beginning of the year. "Ah - nothing to see here. Move along."

It is disappointing to see such awful research still modelled on Macquarie still gaining traction and column inches.
Galaxy share price should be going up with each one of these down-ramps. Investors should be piling on here to get certainty behind their lithium investments because nothing in any of these articles will stop our shipments going out and being paid good money. And that is the crux of it. The lithium production price was never being adequately shared with the producers of hard rock anyway. If there is price pressure then it will fall disproportionately on the processor sector. And that is why I have never been a fan of Galaxy re-entering the processing sector and doing vertical integration of hard-rock.
That area is going to get cut throat and in direct competition with mainland Chinese converters. Who can beat them?
PLS? NMT? I don't think so....

Miners and Briners who can produce a consistently good product with low impurities, who have their clients sorted now and have production momentum and production kinks and costs ironed out, will be fine.
Galaxy will be fine, even with the status quo.
Even if the prices eventually drop to $10k Galaxy will be fine.

That is what is ridiculous about this article for a Galaxy holder. Galaxy is in the door, at the big table, set up and ready to go.
To hell with what some guy thinks will be happening in 10 years time. Just follow the money right now that is pouring into vehicles and battery plants and you can be certain that Galaxy's lithium is going to be there.
The others on the ASX... well... let's say they have more sleepless nights than us coming up.