Banter and general comments, page-33594

Unless I've read this incorrectly, Greenbushes have set their chemical grade price at US$2,984/t for the last quarter of the year (Technical grade prices will be higher again). At that price, demand has softened. Offtake partners have elected not to take full volumes at that price and why would you if you can buy on the Chinese spot market for less many hundred dollars per ton less?

The current Chinese reported spot prices are well below US$3,000/t. For instance SMM currently puts the SC6 price at US$2,110/t. So Greenbushes is only able to sell most (but not all) of its product at a 40% premium to the spot Chinese prices within the Oct-Dec quarter.

All it really says is that the clearing market price for the volume Greenbushes produces is probably under US$3,000/t but Chinese spot prices have indicated that for a while. It also shows that the biggest Spod supplier in the world values their product and given a choice of dropping the price and selling it at something like US$2,500/t or stockpiling for a future sale, they are choosing to stockpile. With Greenbushes cost structure both prices are hugely profitable. That may create a barrier for prices to quickly rise above US$3,000/t but if Greenbushes is choosing not to chase the price down, that's excellent news for future market prices. Some of that buying that would have been under contract from Greenbushes may well now appear in the Chinese spot market and push that back up.

The better headline (from a Spod producer viewpoint) is Greenbushes continues to sell 300kt+ at US$2,984/t.