my two cents without doing too much extra DD on the FA of LTR (not an investor in LTR, but traded it in the past):
Problem: From my understanding, LTR is currently transitioning into a producer. With lithium prices crashing and M&A falling out, LTR is struggling to secure financing for production. This would mainly be due to unlikely being profitable in production in the near future to repay any financing and the uncertainty of lithium prices rebounding.
This is quite a big problem that i dont see getting easier with other large lithium producers pausing their mining operations. Wouldnt be able to say how LTR can nagivate this other then to proceed with getting things started and waiting for lithium to rebound before they crash and burn.
Lithium Outlook: I'm not the biggest fan of using the LIT ETF as a lithium outlook indictor, but it is really all we have. The LIT ETF is jsut about 70% asian battery producers, which is not helpful for showing the lithium demand/supply price relationship which is currently troubling Australia. This would also mean that LIT doesnt include key Australian/overseas lithium producers, but in saying that, lets have a look:
Very clearly travelling in a downwards trend via channel and has broken of out both support and lower channel limit. Not a good sign. I would say next key support level would be at 32ish, which means it has a fair bit it could potentially drop.
Lithium itself is expected to be in oversupply for next 2 years atleast, with potential revsersing to being severely under-supplied by 2030. EV and lithium batteries have not been reaching expected demand levels but I think with countries implementing new policies by 2035-40 that ban sales of new gas cars and the move to net zero by 2050, this would be about right that after 2026-27 would be the key turning point for lithium demand.
LTR outlook: LTR's outlook is gloomy at best. I think it will continue to follow the global lithium outlook and continue to fall as lithium prices set to settle and find themselves. Remember that lithium has not gone through demand/supply cycles over decades like other commodities and it likely trying to figure itself out. LTR's future will be tied to price of lithium like most producers and will likely find its footing later in the decade when lithium is set to rebound.
Chart wise, its currently testing a key support zone, which I think will likely break and trade along this channel going forward.
