Do you hold shares in Arcadium @Megafauna? The "hints" given by PG was on the earnings call. This was Aug 7th.
Paul Graves:"Our own marketing of small volumes of spodumene concentrate from Mt. Cattlin shows that the demand for material remains broad, with over 20 bids received for our latest market testing auction. However, the increase in supply appears to be even greater than this broad demand can absorb, leading to more downward pressure on spodumene prices. And history shows us that when spodumene prices are low, lithium chemical prices in China are also going to be low, and that is certainly the case today. To compound this, we’ve also seen supply of lithium carbonate from South America continue to grow, albeit at slower rates than the growth in spodumene supply."
Analyst Q&A "....just quickly Mt. Cattlin, I mean obviously $700 cost base I assume that’s US with the ad in freight, the quality adjustment, is it worth keeping it open? Is that something you’re actually considering is putting it on care and maintenance?"
Paul Graves:"Mt. Cattlin is a difficult one because Q2 it definitely made sense to keep operating here. The latest prices we see, the spot concentrate, they’re 30% lower than they were in Q2. You’re touching $700 or so per ton for spodumene right now. It clearly does not make sense to operate anywhere, in Manhattan or anywhere else, if your cash costs are $700 and you know about capital into it to get ready for the next phase of mining as we’re stripping as we go. The question of care and maintenance, it’s got to be active in these market conditions absolutely and I can imagine we are asking those questions pretty intensively internally about is that the right strategy for Mt. Cattlin right now. I don’t want to react to just you know one or two price points that come out of China for spot concentrate but if it looks clear that we’re in a period of spodumene prices that are, you know, three digits and not four digits, then I think the whole care and maintenance question becomes much more acute."
Don't forget they are talking Cash Costs(C1) ... and Cost of Goods Sold is higher than that so its a negative operating margin right now. The "acute" question is for how long.
As far as selling SC out of Quebec goes the CFO said basically in response to a question regarding whether it made sense to do conversion in Quebec ... i.e. Nemaska ... and just do the mine/concentrate
"I don’t think that being a merchant of spodumene out of China is a particularly attractive model for many people. It’s incredibly volatile. It’s a long shipping distance. Mining in Canada is not as easy as people think it is."
That's a pretty clear hint. Whabouchi to feed Becancour and when expansion at Becancour is funded (and that includes a customer who participates in the funding cycle, the feed would come from Arcadium completing the Galaxy project. They only ever really talk about integrated chemicals.
No more from me on this ... the Investor Day will outline the future Plan.
More concerned with SYA and its actual future.
SYA Price at posting:
2.6¢ Sentiment: Hold Disclosure: Held
(20min delay)