I've made my thoughts pretty clear on this subject in the past. The LCE market is not a market but a cartel run by the few downstream battery grade lithium producers. The market for spodumene is opaque and governed by off-take agreements which are linked to the market price of LCE (a very small market in terms of value and tonnages with no spot or secondary futures markets). As the volume of lithium battery sales increase, their prices will fall and so will the price of the raw LCE product. The downstream cartels will still make money as although the price of batteries will fall, the volume of sales will increase, however the spodumene producers whose contract prices are tied to the price of LCE will have their margins squeezed not only by the falling LCE price but also by competition for new spodumene production coming on stream.
Look who is at the helm of a company like PLS. The same guy who steered one of the flash in the pan iron ore miners during the iron price spike days. I've even noticed he is doing deals with his old company to transport DSO LiO2 ore. What's the grade of this stuff (around 1.5%). You are frigging transporting 98.5% waste to China. Not sustainable and I doubt that it will be profitable over any significant time scale. Just more flash in the pan stuff to keep the news flow going and lithium bubble inflated. The cartels love that us silly Australians have capitalised their industry with our speculative money. In the end it will go the same way as the flash in the pan iron ore companies and WA magnetite mines (ie equity investors burnt once again and the inexperienced will buy the top and hold all the way down like they always do). I remember the $1.80 GBG days. Reminds me of the current period with the lithium stocks, investors investing based on unproven blue sky and greed.
God help those invested in the African lithium plays. Remember the hype around Simandou and companies like SDL. Even the successful African iron ore plays from 2010/2011 are all washed up now. But who am I to talk. There are any number of new "experts" who think making money on a bubble (short term boom) is equivalent to knowing something about commodity markets or investing. It's not investment it is pure speculation not unlike the crypto currencies although lithium has more utility. Esh
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