So many potential benefits are listed in this thread, I wonder if GLX & Pilbara looked through and thought.. y'know what... we never thought of that!
It will be interesting to see how the trial goes, and also where that envisaged unallocated future production from Plant 2 would be sitting on a timeline.
I would also be interested in the costs for this service and if it is clipping a ticket per tonne sold, what that percentage might look like. - Though this is for unallocated so anything moving outside of this platform I doubt would have a finder's fee attached for ongoing supply which they would want to have to rebirth Plant 2.
Bringing in the idea of an auction brings another interesting dynamic to the sales process also, with the obvious affect of bidders missing out in what might be life or death for their business. - Though they would probably want to establish an ongoing arrangement if that's the case, but it does have the potential to establish another baseline outside of the Carbonate/Hydroxide mechanism for pricing.
The amount of intel that might be gather from such a system would lean heavily in Pilbara's favour rather than relying on a pricing that is established by a manipulated market.
Just on that about spot pricing which others here might find interesting, I was reviewing the Livent Q4 call and listening to Paul Graves talk about spot pricing for Hydroxide and detaching from China spot price... This is what Paul had to say. (I fixed some translation errors)
China spot prices have always been an interesting. Interesting beast in our industry, because I think we had one of our competitors say earlier today that they don't sell really anything to speak of at China's spot prices. And we certainly don't participate in the China spot market. Just the nature of our product portfolio doesn't lend itself to that being mainly hydroxide and mainly qualified material, not just technical grade. And so I think what China spot does is create an unfortunate conversation with some customers about what their price expectations are. And there's always some people out there who are willing to take a risk on qualified material. There's some people are always wanting to take a risk on reprocessing material and that the willingness to do that grows when you see an oversupply into a market like we saw in China.
I thought it was relevant when it comes to what this platform might provide.
The software appears to also do allocation for timelines to deliver which will provide the company with forward planning & visibility with the additional benefit being improved communications with the mine sites. It looks like they will also be able to plug into the system the offline contract arrangements to assist with that planning which would further improve efficiencies.
"the new trading platform will operate in conjunction with the Company’s existing and new or future offtake agreements and will initially be used to sell unallocated or available spodumene concentrate that sits outside existing offtake terms."
I would be fascinated to see how this program works, and would have liked to hear the presentation made by GLX as to how this would benefit Pilbara on a more granular level. Just have other posters have written there are numerous benefits that might be achieved by this product.
@SF@HC that mention of downstream processing opportunities had me thinking not only about the POSCO JV but also that of tolling, and how that might look.
The title of the platform that Pilbara chose is an interesting one also. "
Battery Material Exchange" which might indicate an interest in expanding outside of lithium products or travelling further downstream. Though we already know of their interest in doing the later.
The company already has a pricing mechanism that is tied to Carbonate & Hydroxide pricing which when you think about it is probably more geared towards a tolling strategy anyhow. They could make an offer or take on offers to convert the spodumene into lithium chemicals on behalf of Pilbara.
"As the Company’s business continues to grow including integration into downstream processing opportunities, it is envisaged that further products may be added to the digital trading system over time. This might include spodumene concentrate with differing product grades as well as other value-added lithium products for the battery materials market. In short, it is intended that the Battery Materials Exchange will grow with Pilbara Mineral’s’ business over time."
One thing for sure is that Pilbara continues to surprise and seems to have many hats with rabbits inside.
(20min delay)