Spot on!
PLS isn't CXO or SYA, which is producing, but has "issues." PLS is STILL profitable, if barely, at these prices, and I believe (my personal opinion) that we are at or near a bottom for spot prices. Simply put, the lower prices go and the longer that they remain relatively low, the more supply will come off the market. It's not just the companies like CXO which will go into maintenance, and we can expect more to follow, the longer current conditions go on, but it also means that projects that were going to provide expected supply in the future will be delayed or killed-off. As the old saying goes, the cure for low prices is low prices.
More importantly, on the subject of outlasting competitors and potential future competitors, PLS has a war chest in excess of $2B (I know everyone likes to cite the $3B in the annual report, but I prefer to be conservative, and with P1000 costs, outstanding tax bills and other CAPEX, I'm shaving a cool billion dollars off the war chest (what's a billion dollars among friends?).
Finally, unlike many of our competitors, who are hoping to stay profitable, stay in business, or even get to production, we have multiple sources of growth, many of which are very close to fruition. P680 is essentially completed, and we're producing at P680 levels. P1000 is already advancing, and should reach nameplate in the middle to end of next year. Train 1 of the POSCO JV is already producing and ramping-up and Train 2 should commission in the next four to five months. All that, plus the Calix JV is now moving forward and the annual report indicates that we're already negotiating for a 300 ktpa OTA with a still unknown joint venture with another downstream partner, likely to be similar to the POSCO JV.
Lithium is a commodity. The price will swing up and down, it's been both too high and too low in the past, it's too low now, but it will also be too high, again, in the future. Based on the last five years of price charts and considering the anticipated demand over the next five years, it is my OPINION that the average SC6 price will probably be somewhere in between U$2,500 and U$3,000 (it will be lower sometimes and higher sometimes), PLS will make money hand over fist at those rates, and in two years, we will be selling one million tonnes per annum of SC6 (OK, probably SC5.3) and 30% of 43 ktpa of LiOH from the POSCO JV. That represents nearly 100% growth from what we anticipate for this year.
Best regards
Expand
(20min delay)