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asb83

5,936 Posts.

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26/05/19

10:41

Post #: 38747110
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Originally posted by Grooveamarda ↑

This is a straightforward game of strategy (101) from a dominant producer. All SQM are trying to do is stifle investment in the sector.

Punchline... $12B USD is needed over the next couple of years to meet forward demand forecasts.

Rationale:
SQM want to dominate the sector / goal retain position as a top 4 producer
Talking down price is counter intuitive to getting to best price for the product they sell
It's a signal to all lithium producers/competitors/new entrants
Helps the majors to consolidate the industry at a low price
Try buying an EV, there delivery delays everywhere (1-3 month delays)

Finally, I'd comfortably wager that Li brine prices will be largely stable and prices will range within +/- 5% this quarter.

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I hope you don't wager much on that bet. You're already down a lot so far this year on your lithium portfolio, so no point throwing more money down the drain.

GXY Price at posting: $1.57 Sentiment: Hold Disclosure: Not Held
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0 Great analysis

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