Ann: Strategic Review of Operations Underway, page-63

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StuvaC

753 Posts.

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22/12/23

10:43

Post #: 71585929
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Originally posted by BRProject: ↑

Not good? How so? This risk has already been priced by the market. We have already priced it. Everyone were already forecasting it.

This is actually good news. Nothing better than macro getting companies to reduce cost and increase productivity.

I have mentioned this before, the forecast of lithium oversupply for 2024 is wrong. It does not take into consideration the reduction of production when producers' profit margins are hurting.

It is also wrong to suggest there is not enough demand to catch up to supply in 2024. With interest rates now forecasted to fall, borrowing cost will fall with it and therefore more demand, and lithium would be back to crisis mode again, combined with re-stocking inventories would increase lithium price. It can turn from quite quickly because economies fear recession.

So a reduced cost based on what the macro has gotten CXO and others to do (reduce cost and increase productivity) , which is ultimately due to profit margin hurting (CXO is not the only one) , then CXO would therefore become more competitive with higher margin to an eventual increase in Li price.

Look at the broader picture. "The market" are well aware and sensitive to what a low Li price does to their future need of raw materials supply... as mines takes years to turn on.. there's no easy switch to turn them on/off by days or weeks.

Hold your shares. IRR does not materialise overnight.

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Funny how good news is a nearly 20% decline. I'd be absolutely furious at management if I held this ever since the reshuffle happened at the top you've lost $1b of market cap and now they blaming spot prices haha jokes.. I'd be selling the lot and never buying back or trusting this lot again.

Last edited by StuvaC: 22/12/23

CXO Price at posting: 27.0¢ Sentiment: None Disclosure: Not Held
8 Upvote

3 Great analysis

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