General Discussion AGY, page-20911

@Trufflehunter

It's waaaaay too early to say there's no more oversupply mate. Currently, only a handful of companies have reduced their production, while numerous others are ramping up supply despite market conditions. According to various analysts such as ANZ, UBS, and Fastmarkets, there are still forecasts indicating a 30-40% increase in supply for 2024, compared to approximately 25% growth in demand.

Although there's optimism about supply reductions, the evidence suggests that the current cuts won't sufficiently counterbalance the projected gap between demand and supply growth. So far, the only confirmed cutbacks I've observed are from CXO (ceasing spod production of 80 ktpa or roughly 11 kt LCE) and IGO (cutting 100 ktpa of spod or around 14 ktpa LCE production from Greenbushes). Perhaps we could include SYA in the discussion since they're also struggling, but their annual production is only 220 ktpa or approximately 30 ktpa LCE at nameplate. There's also been some estimates that Chinese domestic production has fallen around 20% recently, but last I heard they only accounted for about 12% of global supply anyway, so we're talking about maybe 24 ktpa LCE reduced domestic production in China.

This totals around 80 ktpa of LCE production confirmed to be offline this year. However, when we consider that Lithium Argentina is bringing online 40 ktpa LCE from Cauchari-Olaroz and Arcadium is adding 45 ktpa LCE this year from their Fenix and Olaroz Stage 2 expansions, these two companies alone more than offset the supply drop-off with their expansions.

Then of course there's the other new production coming online from Sal De Oro (POSCO), Mt Marion expansion (MIN), Wodgina expansion (MIN), Grota De Cirolo (SGML), Kathleen Valley (LTR), Centenario Ratones (Eramine), etc.

The uncomfortable truth is that a lot more production needs to be curtailed or withdrawn completely for the oversupply to dissipate. The other unfortunate truth is that AGY is a prime candidate for supply to drop off, as it doesn't have funding, doesn't have an offtake and is struggling to produce more than a few tonnes of carbonate.