Short Term Trading Week Starting: 15 Jan, page-441

What does it say to you?

I see poor analysis by Roskill and an SQM deal that is being blown way out of proportion. I see it caused negative sentiment in the market and shorts on stocks like GXY and PLS have been 40% of volume to capatalise on fear selling, and stop losses.

You suggest its a systemic shift? Care to give us some analysis on why?

Why do you think brine is better than aussie hard rock. SQM deal at current prices blows them way up the cost curve on any new production. At the $14k carbonate is currently fetching for them. They would be paying $2,968 in lease payments alone, let alone any other costs + all the extra overheads imposed.

Then on top of that you have the fact that the likes of SQM are in reality still producing carbonate as a by-product to potash. New lease payments are an increase of about 70% on potash compared to current as well. That effects margins there. Not to mention they can't just quadruple potash production overnight without impacting supply/demand of that market and tanking their core business.

TAW, PLS and AJM together will probably put about 50kt of LCE into the market in 2018. That is about 0.70% EV penetration excluding buses, trucks, home storage etc to eat that entire supply up. Not to mention it is all contracted, PLS prices are carbonate linked, TAW is fixed price etc.

So tell us what news exactly in the past week has warranted 10-20% sell-offs amongst current and near term producers in Aus, because they are the ones that have been hit. Spec Li still firing.