Thanks for the acknowledgement. I've been having my own existential crisis about why and if I keep posting on HC... I make no friends on HC but are losing them in the real world for 'switching sides' as it were. That some readers appreciate the input even if they don;t like my opinions certainly helps balance the scales.
"if we all broadly agree that historically demand grows inline with global GDP."... but it doesn;t, I just proved it with a 12 year global supply chart that's stuck at 1.2Mtpa zirc, and demand can only equal available supply. Historically, demand growth is a furphy although that may change, IMHO it won't change, and demand may even decline. Reasons include China (who imports 60% of global zircon) going ex-growth property after building out massively residential and commercial floor space in the last decade. Massively overbuilding actually. China has dominated the use of tiles in construction, where the West has progressively substituted laminate and wood (engineered veneer often) for tiles outside bathrooms. All tile houses are so 80's...
"3 very Senior & experienced people covering the M/Sands sector (Analysts, Geologists, Corporate guys) have all basically said time and time again in the last couple of years that its 'all about the supply side of things' here"... they are right it's all about supply side, they are heavily conflicted imo regards looking too closely under the hood of future supply. They are sell-side employees paid not to bite the hand that feeds...
" I have bought a big chunk of STA and more recently some other M/Sands players (but not SFX which I need to have a look at - its just hard getting your head around so many different stories!) based on the supply side story"... There is a massive contradiction in buying many new developers all taking advantage of a supply deficit. They all can't be developed, or even a few, before that deficit becomes a surplus. Over-weight sector investing can be work really well or really badly...
" Zircon has been trading at historically high levels in recent years as you know"... yes it has. It started with one of the world's largest mines, RIO's RBM in Sth Africa, closing down in 2019 and multiple times later on because of violence and community unrest. Then came covid supply disruptions in production and shipping globally, running down of inventories by panicking zircon end-users, who ran headlong into the biggest stimulus package and goods consumption boom ever. Suddenly low inventories had to be re-built to over-sized inventories, all while hitting new all-time high production levels (double whammy) but where supply was behind and slow because of covid (triple whammy). Even after covid disruptions ended, there was no inventories at mines or end-users, so prices stayed very high with no slack but still booming demand. A perfect storm that will take years to unwind, how quickly depnds a lot on how deep this global downturn becomes...
I like lithium and copper (copper more medium term because more restricted supply growth than lithium), like nickel but the pig iron guys are a price cap, don;t like graphite (huge supply coming on and new anode tech will substitute it out over time), don't trust rare earths, but if you want RE exposure then mineral sands is best exposure imo. I'll keep my portfolio to myself if that's alright.
Good luck
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