@DaisyA
That is a great post. Everything is covered.
Actually everything looks quite simple to me atm.
Spod concentrate and lithium carbonate price were too high when they reached to US$8,000/t and US$80,000/t respectively. It was unsustainable. The Chinese did that stupidity. They were greedily buying it.
Now he lithium price is too low, they are stupidly not buying it. They buy the cheap and dirty lithium raw materials and trying to make them battery grade lithium chemicals. That is not possible either.
Lithium is a commodity (other than being a specialty chemical when processed) and it is now in the classic commodity cycle. "The cure for low commodity price is a high commodity price" rule is going to work, Hence we will see much higher prices.
Because there is a mining production incentive (cost) price for lithium commodity. When the market price gets close to it then many projects will stop developing and production. That is already happening.
It is well known that average of producing lithium carbonate of Chinese lepidolite is definitely below incentive cost price atm. We know there are different lepidolite grade mines in China but even the highest grade is now producing the lithium carbonate (that is a vertically integrated plant) nearly at a cost (US$10,000/t) which is close to the spot price (US$12,000/t) of lithium carbonate. But that is just a couple of mine with little capacity. The other vertically integrated plants with mid and low grade lepidolite is making a loss if in production. The stand-alone mines and lepidolite refineries are already out of business.
Same for the Zimbabwean petalite and some spodumene resources (which are very limited. The biggest spod mine is Sinomine's Bikita mine and it's going to buy from LT now). They are all high cost project.
When we look at the supply side the high cost projects are now halted, gone into car and maintenance, etc. So the supply side is shrinking but not expanding.
No new project can get finance. There are 10 hard rock spodumene projects in James Bay Canada. Two of them are owned by Arcadium; 1) James Bay Project (inherited from Galaxy) 2) Nemaska Project (Inherited from Livent).
How these projects will be developed now? Not possible IMO. All of the others there including Patriots Corvette project is not possible to be developed anymore IMO.
I am not saying the lithium price should be as high as possible to allow all lithium projects realised. No, not all lithium is equal. Some projects will be realised while some will die even in a market when the lithium price is good enough. However when the lithium price is too low that means it is going to go increase to bring the market equilibrium back. Hence the higher lithium prices are on the way.
Just a technical note for you to understand the importance of a good quality battery which can be only made with a good quality lithium which has very low impurities like LTR's; I'm also making a lot research and application work with LFP battery cells for sailboat and caravan electrical systems. I saw that the Chinese LFP cells in the market are all technically suspicious in quality. (We can't find any western made cells, despite buying a western made complete battery which is very expensive)
We are trying to find out the best BMS -Battery Management System device to control the cells. Because in lithium cell business, every individual cell behaves differently like a human. That's because the impurities in lithium in the electrolyte and cathode of every cell can be different. Those impurities affects the storage capacity hence the voltage is being different for every cell.
For example for making a 12V 100Ah battery you use 4 of 3.2V 100Ah cell. But if one of the cells are not giving 3.2V and giving 3.1V instead, that's being problem when you put them together. When you discharge the battery that lower voltage cell causes the other cells to be overworking. (Just like humans; if one is not working well in a team then others have to work harder). Then when you put the battery in charge, the other cells needs longer charging time than that stupid cell. However that stupid cell remains long time under charge because it has to wait for others to be charged, then it's being overcharged.
In the overcharge state that stupid cell can develop dendrites and those dendrites can punch the separator between the cathode and anode. That is called the short, which causes the fire.
So the battery makers (even the amateurs now know how to do that) try to put the cells together which have same specs in voltage in a pack to make a battery.
Btw the BMS is controlling every single cell during charging and discharging to make sure that they are charged and discharged at same level. It's like the social security department of the electrical system. In the EV's there are much more advanced BMSs which can even shut down a cell when it behaves erratically (like the justice department). So BMS is the most important part of the lithium battery technology atm.
You can see from all these that there is a huge difference between low impurity and high impurity lithium. The chemical lithium refinery can remove the high impurities from a lithium chemical (lithium carbonate or lithium hydroxide) for making it low impurity but that will cost them a lot of money. It's not a easy job.
So if a battery maker wants to make a good quality lithium electrolyte and cathode they will prefer to buy a spod concentrate with very low impurities. That's why LTR's spod will be sold at a premium to those who want to make quality batteries.
The last note, iron content is the most problematic impurity in lithium chemical. LTR has very low iron content in its ore and spod concentrate. It's the lowest in the market.
So not all lithium is equal.
Not all lithium batteries, even all cells are equal.
(20min delay)