Rodney Hooper
2021 - The Year for EMH, page-1038
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Last
16.5¢ |
Change
0.005(3.13%) |
Mkt cap ! $34.22M | |||
| Open | High | Low | Value | Volume |
| 16.5¢ | 17.5¢ | 16.5¢ | $13.68K | 80.53K |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 1 | 31250 | 16.0¢ |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| 17.5¢ | 29206 | 2 |
View Market Depth
| Last trade - 16.10pm 04/10/2024 (20 minute delay) ? |
| EMH (ASX) Chart |
The lithium market is currently experiencing the perfect storm through a combination of rising EV demand, inventory builds & new supply is limited. The "swing" supplier is spodumene concentrate (SC) & recently, we've seen substantial spot price rises culminating in Pilbara's "spot" auction where 10kt of SC5.5 FOB Port Hedland attracted 62 bidders willing to pay between US$700 - $1,250/t. In the battery-grade chemical market, 2021 contracts agreed at lower prices in 2020 are negatively affecting formula based SC contract prices - we estimate Pilbara's Q2 2021 average contract price at US$550/t - well below the recent winning bid at spot auction (US$1,250/t). Pilbara is in the fortunate position of restarting the Altura plant & being able to capture more spot pricing. Can new producers secure full funding without binding offtake contracts based on agreed formulas & price floors? We believe new DMS only SC projects with low capex commitments will enjoy maximum sales flexibility if they can self-fund.
Below is a graph of #RKEquity's estimated "fair value" SC6.0 FOB Australia price that allows Chinese independent converters to earn a 15% operating margin based on the ex-VAT chemical price. We calculate that the winning spot bidder at $1,250/t (SC5.5) would need a battery-grade chemical price of $18k/t+ to earn a 15% margin. Given this reality, the speculation is that the buyer is a new converter desperately looking for material to start production.
Will current higher chemical & SC prices finally secure much needed financing for new projects to ensure future supply?