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Battleship

925 Posts.

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06/06/19

11:33

Post #: 38937277
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Originally posted by Pistol007 ↑

Finally got a chance to listen to the AGM (Thanks for the recording Thesi).

Have a question about AT's comments on the converters sitting idle in China as the high cost of money etc made it uneconomic at the moment and they were waiting for lithium prices to increase before starting up.

That was great context of what was going on at the moment that I'd not heard before, but it generated a few questions in my mind as to what is going along the supply chain.

If a number of converters are sitting idle because of price then surely there is sufficient battery grade lithium in the supply chain to build batteries without the need of these converters. Therefore the demand at this moment is not there or maybe the battery makers are constrained and would like to build more batteries but they need to complete further investments in manufacturing capability first.

I'd be interested to understand peoples thoughts of the supply chain as the price dip could simply be a timing thing (and could recover in 6 months) or there may not be the demand in the market at the moment and it could be 3 years before the real demand kicks in.

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From my novice view there seems to be a disconnect in the supply chain.

We have seen Tesla saying they aren't getting enough batteries from Panasonic.

European car makers are having to buy batteries from Chinese companies, I'm sure they would prefer another source but have no other option.

But at the upstream end spodumene converters are bottlenecked.

Seems very shoddy/poorly executed to me.

GXY Price at posting: $1.47 Sentiment: Buy Disclosure: Held
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