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07:13
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Originally posted by regal:
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Some of you may be new to lithium investing, don't create news in the absence of news. As an ex holder of gxy, was the highest short selling stock (lithium) on the ASX. I'll try and explain some of your concerns. The demand for lithium metals has been around longer than fives ago. The last so called oversupply was a false narrative. In 2017-18 the Chinese went on a shopping spree of lithium miners. Ganfeng in PLS and a host of others, Tianqi bought 30% in SQM. Surprise, surprise, after the sale sqm reduced battery grade chemicals and flooded the market with low grade technical chemicals.The aim was to stop new mines coming on line, giving them a bigger market share. The Chinese did not not honour floor price and insisted spot only, which they were driving down. They blamed covid from low demand. Australian miners were forced to sell below cost, as many had large debt. The Chinese then went on a bigger shopping spree of lithium miners. As the economy reopened, the miners were not there to fill the orders, as a result prices are rising. The $6000 spod and $70000 chemicals price being floating are spot, they are not contract price and not what companies are getting for the bulk of their earnings. It's media hype. Chemicals have shelf life of 12 months, after which they must be reprocessed. Spodumene (rocks) have no shelf life. In the past, processors hold three months supply in their inventory. The rise in spot price means the inventory is being used faster than expected, those without contracts are struggling to meet their orders. The GS and CS reports come on the back of their increased holdings in lithium miners the Chinese are trying to buy for cheap. The Chinese cannot produce high quality product from their mines and are trying buy miners and deposit from Australia and South America. The shorting is to take profit and increase their holdings, for themselves and clients when they change the narratives to under supply.
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you must be seriously bleeding money to write all that basic supply demand blah, 75c is a support level to park at soon, the delays re construction are running the show atm, construction delays equals shorters on board
(20min delay)