https://hotcopper.com.au/threads/0-8-high-quality-battery-grade.4909441/page-54?post_id=40064032
PILBARA MINERALS LIMITED (ASX
LS) - <0.8% = High quality Battery grade, 40064032, page-54 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum
* Yes, AJM and PLS are linked to the Chinese lithium carbonate spot price. However, in a sense everyone is linked to those spot prices. A40 and GXY have had to reduce their prices. A40 just recently couldn't charge a US$680/t floor price for its low impurity, high grade ore and likely is recieving closer to the US$600/t that PLS/AJM are. GXY too has come down. More generally, even the likes of SQM have had to reduce prices. Hate as they might, the Chinese spot price, is reflective of the current supply situation.
0.Note that with lithium carbonate price, and then plural prices* you’ve obscured the fact that there are industrial and battery grade lithium carbonate prices. My contention is AJM and PLS are linked to the industrial grade lithium carbonate price, and shareholders here need to ask Ken & Co whether the likes ofGanfeng can manipulate the spot price? This is hardly the transparent LME.
* It's my belief that PLS and AJM started with lower offtake prices than GXY and A40 due, 1) their later arrival into sector which had declining prices 2) GXY/A40 likely had longer term contracts negotiated when prices were stronger 3) accreditation period to prove up their products 4) desperate to get offtakes to survive.
0.Yes desperate to get off takes led to a poor decision to link to the industrial grade lithium carbonate market, and it’s worth adding there was hardly any modeling on the hydroxide market back in 2016. And yet PLS has done a 10 year contract based on 2016 conditions. So, can shareholders be sure PLS have not given the upside to Ganfeng. Recall Ken Brinsden in the first Lowry podcast was surprised at how the took to thepricing mechanism. Lowry was ‘silent’. It is arguable both PLS and AJM have unwittingly damaged the market for new not-vertically-integrated producers).
This then fuel the theory that lower offtake prices = lower quality concentrate. We have seen since both GXY/A40 prices come down.
0.I have shown the benchmark for deleterious elements in Chem grade SC6 with for example iron maximum 0.8% and I think the market hasn’t seen a price for Chem grade SC6 because no one is selling it in the market!!
0.Unfortunately, Tianqi has not published a standard for SC6 because ALB\Tianqi don’t market CG SC6 product to third parties they have knot published standards for TG.
0.It’s worth noting that higher quality batteries will have tighter specifications but with Lifepo4 the standards are a little looser perhaps due to cobalt stabilizing the chemistry.
* The fact that GXY was getting very high prices for its high mica, low grade product (improved some since) makes it hard to believe that some sort of 'battery grade' significant SC6 premium existed for low impurity concentrate.
0.It does exist but only with Talisons at significant volume. Basically higher spec delrrrious count SC6 is attracting markdowns. I do not think GXY was receiving high prices, perhaps your impression reflects that AJM and PLS did bad deals around linking to industrial grade lithium carbonate prices?
* As time goes on, more and more carbonate and hydroxide global output will be battery grade. It's already happening. This is purely due to the demand growth rate for battery grade demand dwarfing technical grade. So the spot market will eventually be populated with mostly battery grade products as EV based growth demand for battery grade will dwarf demand for technical grade uses.
0.Going forward standards need to be openly published as they currently are for TG SC5-6.5-7.2 products. If anyone thinks price manipulation is not executed by Chinese majors, think again, with iron ore cycle, Rio and Chinalco....yes there surplus supply but what where are the technical data sheets? As a physicist you would know every laboratory has these specifications, so why are you defending a lack of transparency?
As a consequence, this 'lumping of technical and battery grade into one price basket' theory will disappear anyhow.
0.Correction, industrial with battery...
* Battery grade comes from the carbonate level/hydroxide level of the production chain, not the spodumene level. As discussed, while impurities can drive up costs for a converter, battery grade can be producer from all kinds of impurity riddled concentrate. Some impurities, like iron, are easier to remove than others.
0.“Easier” but not as easy you would like to emphasise, otherwise PLS would not be ordering another LIMS unit. Behre Dolbear state introduced iron “tramp iron” can be removed, so if easy and if only “tramp” aka “introduced” iron species then why the extra LIMS unit? it’s not a matter of grain size consistency alone as you’ve stated as the issue.
* Ultimately, PLS/AJM have offtake specification that they need to meet. They are meeting those.
0.Present Future tense “are meeting these” obscures the fact that PLS is not, as a LIMS unit is being ordered. And as for AJM, listening to them hi would never guess until it’s unbearably obvious something is wrong, and on multiple occasions. They have their pricing because, I suspect their SC6 is poor spec for converters, hence more processing costs.
Read today's AJM annoucement where the company goes on at length that its offtake partners are pleased with the concenrate they are getting.
'China marketing visit provided further positive feedback on the quality and long-term demand for Altura Lithium concentrate'
0.They must be happy with the contract that gives the upside to China whilst they process ‘junk’ industrial grade SC6, as AJM certainly doesn’t produce chemical grade by Tianqi standards.
' The demand for Altura spodumene remains strong with customers citing the exceptional quality of the Company’s product. A recent marketing trip to China has reinforced consistent positive feedback from clients with regard to the quality and consistency of the product which is making a point of differentiation in the market.
'Altura continues to receive positive feedback from its offtake customers regarding product quality.'
0.Why would they say anything on negative feedback? Marketing 101
I have seen absolutely zero evidence with respect to both PLS and AJM of any offtake partners claiming problems with their concentrate quality.
0.LIMS unit being ordered by PLs, is that not evidence? The prices keep sinking (it can’t just be market trend). You have stated there is an issue with consistency but now you’re saying absolutely zero? Which is it? Looking at an average of 1.8% iron in 1st qtr published by PLS as not a “problem” likely to affect converters, just ignores PLS’ stated target last year when first commissioning, to get below 1.4%.
0.Tianqi Chem grade is max 0.8% for iron. Tried and tested ratios you want to ingnore by the industry leader ?
(20min delay)