Allkem General Discussion, page-3250

STW - thanks for highlighting the podcast - excellent conversation from two of the best.

Egeria - I totally get the point that low joe and Daniel were making - if last year the Chinese were buying the bulk of their lithium supplies under contract prices which were considerably lower than the then spot price and the spot price was viewed as a forward looking price then it would make sense for them to have built up stock piles of concentrate. If however the group think in China changed for whatever reason to the idea that supply will in 2023 become more than demand then it would now make sense to run down their stock piles before the current spot price becomes less than the contract prices they paid last year. It makes no sense to hold onto material they bought at a higher price if they believe prices will only keep getting cheaper. What JL and DJ agreed on is that if you work methodically through all the incremental increase in supply in 2023 and if you look at the expected demand in 2023 then the China group think is wrong, and supply will not match demand and prices will actually go back up sometime in 2023, according to Joe in the December quarter and according to Daniel much earlier than that.

The swing variable for supply seems to be that China claims that it can double in a year the production from domestic Chinese brine from ponds that have already been operating for over two decades (the logic that doubts that could actually happen is along the lines that it is very easy for a sapling to double in size in a year, but much harder for a mature tree to do so). Also neither gave much hope that 2023 will be the year Zimbabwe as a lithium producers shoots the lights out.

Interesting that they both think that Australia could impact the global market by going downstream to supply the US and the EU rather than just feeding upstream to China.

It seem neither Joe nor Daniel put much stock in Allkem and Olaroz adding much incremental production in 2023. Both Joe and Daniel come from the well established big lithium producers so perhaps when they go looking for material incremental contributions they only think of those old well established producers. Anyway Joe has always been negative about Orocobre so maybe that continues on. Or maybe they look at Allkem's trophy cabinet and still don't see a Liverpool FC or a Real Madrid in Allkem. On the positive at least they made no suggestion that the wheels have fallen off Olaroz 2.

Final point is how Daniel said that Sayona's new NAL production project is geologically challenging and Joe commented something along the lines that high prices allow even marginal projects to get off the ground. For me, kudos should go to Brett Lynch and the team at Sayona for striking while the iron is hot.

A really meaty conversation from Joe and Daniel - just what I was looking for on a Saturday night - thanks again for the heads-up, STW.