LTR has no problem IMO guys. The problems are all externally...

LTR has no problem IMO guys.
The problems are all externally sourced.

First of all there can't be a spot SC6 price because there is no one producing it other than Greenbushes. LTR will be the next one.

Where is Wood Mackenzie, Fastmarkets, BMI and others are getting the spot SC6 price is a mystery.

When it comes to Greenbushes SC6 price it was US$3,750/t in Q3-2023 and projected to be US$2,950/t in Q4-2023. IGO said on its Q3-2023 report that Tianqi/IGO JV were not happy with US$2,950/t in Q4-2023 and will reduce its sales by 25% in Q1-2024, if the price won't recover from there they said they would reduce the production.

LTR is doing the same now. They will reduce the ore mining from 4mt to 3mt to its original phase.

Those price forecaster are all making wrong forecasts. You can see it here "Six factors shaping the lithium market" on Wood Mackenzie web site. This is still on their web site, made on May 2023. (Red markings are mine).

How can you rely on the forecasts of such unreliable companies then?




Therefore LTR management should have not accepted Wood Mackenzie, Fastmarkets and BMI price forecasts. They should have taken the realised price of Greenbushes sales price for SC6.

What happened is happened. Even Greenbushes will reduce its production, so will LTR. No problems.

It's obvious that this is a commodity cycle for lithium.

When the spod lithium price went to US$8,000/t it was too high indeed. The Chinese started to mine and process its low quality and even low grade lepidolite and brine resources which is typical for a commodity. They also shipped the raw spodumene rocks from Africa and even trucked it from Afghanistan. Now most of it is being uneconomical at these prices. Only the brine production from Qinghai is ok and it's even at the same cost price with the highest cost of production from spod resource in an integrated plant. Spod production in China is very limited and can't be increased much. Also same thing for high grade integrated lepidolite production which has a cost close to US$9,000/t.

So, it's not possible for China to increase its lithium production at these prices.

See the graph below.



China is dependent on its spodumene imports from Australia.
See the graph below. China's spodumene imports increased around 50% from 2022 to 2023, and majority of that is from Australia.

What happened to lithium prices is this as I explained before; China completely destocked its inventories, CATL and BYD who are the biggest makers of batteries in China (both selling to Tesla too) started working with very low stocks and Tesla BYD as the EV makers used "Just in time" production rules with no stock. Therefore Tesla suspended its factory production in Germany when the Red Sea closed for ships, because they have no stocks in Germany.

Therefore they will consider those geopolitical risks from now on and will have to keep some considerable amount of stock.

If the Australian spod mines reduce the production China will be in very hard position. The main goal of Chinese is to sell EVs to whole world but not to sell batteries. Therefore they should not allow the Australian mines to stop production for their own sake. Otherwise they will see the spod price at US10,000/t this time.

China just closed the demand gap in 2023. But they will not be able to close the demand gap from 2023 to 2024 which will be at least 30% growth.

The battery demand growth was 44% in 2023.

That is a serious demand increase. It's all about lithium. Here is the info from Rho Motion web site. That is even higher, I think it's close to 1.1TWh because this report was made too early.



Here is the larger version. (red marking is mine)




When it comes to Gina's takeover ambitions; yes it's not only Gina who has cash and who wants to buy Tier-1 a lithium asset. There are others; WES, RIO, SQM, etc. I can name a lot of them here.

If Gina makes a low ball offer it will be rejected or we will receive a counter bid. I'm even expecting a new bid from ALB

I still don't want to sell my shares at a cheap price. I want to go to production. Some of you may remember what PLS did in 2021 when the lithium price was low. They did a large CR and saved themselves from being bankrupted. AustSuper paid a lot of money at 36c. Then it went to $5.40 and PLS made $3.5b in two years time.

So our management is doing the right thing IMO.