Lithium research relevant to KDR/SQM, page-259

Yes it's mostly nonsense, but I found the cost chart of hydroxide useful, which is actually McKinsey's anyway. Apologies, I should have said ignore the rest of it, as I couldn't actually finish reading it myself. Just linked it for that section.

I'd call $8,000/t highly pessimistic as well. That's a 50% drop from what SQM just reported they've seen in the first quarter. Obviously prices aren't going to remain sustained at these levels forever, but it's a question of the marginal producer and what their costs are. This links back to our earlier discussion about whether the majors can/will flood the market to wipe out the new entrants.

So far, they seem more likely to enter JVs or make acquisitions than pursue organic growth which suggests it is cheaper/easier to bring new projects online than it is to expand the ones they have. That means the new entrants are going to get into the market, and it will the ones at the top of the cost curve, the seriously questionable projects, that set the pricing.

I don't think that's going to happen sub $10k. The producers seem to have too much market power.

Tesla coming along and signing an offtake deal for 3-years away with a refinery that hasn't even finished the feasibility study suggests anxiety for car manufacturers to secure supply. This view would be further reinforced if/when KDR signs on major car manufacturer (if that is what they mean by "strategic, globally significant parties"), that doesn't have questionable finances.

Again, if they are continuing to go up the supply chain to secure their product, it suggests scarcity, and scarcity supports the higher price needed to encourage new projects to come online.

With all of that as a backdrop, I don't really know what you can learn from the historic lithium price chart? I have looked at it, I just don't see what it is going to tell us.

The market is transitioning from a dull, niche oligopoly to a rapidly expanding market, still dominated by the early key players, but with a lot more overall participants. A lot more volume, as well. The demand has also drastically changed, with EVs obviously supplanting the glass, ceramics, pharmaceuticals etc that were previously the focus.

What was once steady-state production will no longer be close to realistic, so I don't see how the historic circumstances, and therefore the historic price, are that informative.

Cheers