Do you think China is stocking at a 1 to 1 ratio with car sales (Actual orders from car manufacturers)? Or does their inventory move based on current orders and anticipated future orders?
I can guarantee you that the stocking that occurred was not based on actual orders, but anticipation of future orders. Now the rate of orders have slowed, all that surplus inventory can be drawn down over time.
Additionally, we are seeing more lithium come on to the market. So the imbalance was not created by actual orders, it was the anticipation of future orders and not having enough supply. Now that order growth has slowed that marginal buying demand which has disappeared will force the market back towards balance.
It may go out of balance again in the medium term. Which is why i still hold.
PLS Price at posting:
$3.83 Sentiment: Hold Disclosure: Held
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