Hi Windrider
While I agree with some of your points, I find others surprising.
I use the charts across the various EV sectors which includes Lith miners, chemical processers, battery and auto markets. Every week, across the world billions are invested in the market and this is reflected in the charts. To assume that these charts don't take into consideration Geopolitical or Supply/demand issues is a bit naive
In the EV sector China basically owns and controls the casino. The rest of the world has been asleep. While the US could cause a small speedbump in the road, Europe is so bound up with red tape that it prevents sourcing any serious EV materials from Europe itself.
I agree with you that eventually the supply/demand issues will turn and the Lith prices will turn upwards. However WHEN is the big question.
So much analysis is conducted about the EV supply/demand sector. So lets take a look at the charts of the top 3 EV auto makers in China. Not numbers of vehicles etc, but the the SP of the companies doing the business.
Wuling (0305) was the biggest EV manufacturer in China.in 2021-22, In the chart below you can see that in the last year the SP has dropped 75%.
An isolated case? No.
The second biggest EV manufacturer in 2021-22 was Tesla(TSLA) Which since July has fallen 40%.
The Third biggest EV manufacturer in 2021-22 was BYD (1211). Which again since July has fallen 40%.
The charts don't lie, analysists can paint various pictures, interpretations and projection for possible change, but the charts are the concrete fact of the markets behaviour. Notice that these extreme declines in SP for the manufactures was occurring while the Lithium prices were plummeting.
So obviously profitability is behind this common story, for whatever reason. These companies are the end of the supply chain for Lith miners, chemical processers and battery makers, so no wonder various supply prices are dropping.
I don't fight the trends in the charts, but I can't see a trend change in these three companies in the near future and they represent the demand side of the supply/demand argument.
The price of input materials ( Lithium , nickel and graphite) for the EV sector will eventually turn upwards from this downward cycle, however there may be a few false starts. But when? Only after you see blood on the streets from a few of the weaker suppliers, just like happened to Altura.
As per the big players on the PLS register. I liken them to pimps, when they move into the neighbourhood where the street workers were working independently. They are here for the money and generally action increases and everyone else gets screwed.
The likes of State Street, JP Morgan and Goldman Sachs wouldn't sell their mothers, they would just loan them out for months at a time, for a rate of coarse. When I see them move into any of my shares I know that games are going to be played and shorter action will be on the rise. Even the good guy Australian Super is loaning out shares.
Just my opinion so as always DYOR
cheers Lies
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