First of all the lithium price on the market today does not reflecting the true lithium price of lithium chemical (lithium carbonate or hydroxide) which is used in a high quality batteries. Even saying this is not enough to explain the lithium prices of different lithium chemicals.
More importantly, 90% of the spod concentrate and lithium chemicals are sold through offtake agreements. Only 10% is on the spot market. This was said many times in different platforms by different lithium experts but some manipulators are still pushing the idea of low lithium prices on some platforms.
It'd be enough to look at the sales of Greenbushes mine in Q1-2023 and Q2-2023 because the Greenbushes is the only mine which can produce SC6. And these two quarters are the worst for lithium and EV sales as you may know. I gave this info before.
Q1-2023 SC6 sale ave. price was US$5,783/t Q2-2023 SC6 sale ave. price was US$5,431/t
What else we could ask for? That is 4 times more than our DFS price which was $1,390/t.
And I was making my calculations for US$4,000 for KV.
US$5,431 is even 30% higher than US$4,000/t.
Even with US$4,000 LTR's revenue would be US$2,4b (AU$3.7b) for 600kt annual production. We have done these calculations before.
Say AU$700m is the cost ($250m annually goes for U/G mining contract), then LTR's profit would be AU$3b EBITDA.
That's the reason Gina was buying LTR and will keep her stake. She's smart and well informed.
When it comes back to lithium price, you can see easily that there are different types of lithium spod concentrates and lithium carbonates, because there is very wide usage of lithium in very different batteries.
The major OEM EV manufacturers are also using different battery types in their EVs however they all want the best quality battery which can only be made by the lowest impurity lithium.
I haven't got new data but my old post #:69616064 is still valid.
The only additional thing I could say is that the lithium market is being downramped by some manipulators and their media. They are shorting the major lithium stocks like crazy. They are actually racing against the time because they should close their shorts before the lithium deficit is officially announced and acknowledged by everone.
I am watching the shorts in PLS. 11.62% or 350m shares are shorted. What would they expect to happen to PLS? That's crazy.
I can't see any logic on this. I would see if the EV sales were going down, or a WW3 about to start, etc. etc.
Then what is this? What's their logic?
Is this a new generation of traders who knows what we don't know through the Matrix?
Yes... there was some logic in shorting some lithium stocks because there are many scam lithium projects, or poor ones. (I'm not going to name hem anymore) however not all lithium stock is equal as not all lithium is equal.
You can see on my old post that EV sales growth is very high in comparison to lithium supply growth. It's a very simple mathematical equation.
Here is my old post #:69616064 here below, it is still valid. ----------------------------------------------------------------------------------------
Following up my recent post here. Time is passing... KV development is going on at very high speed.
The data is flowing for EV sales, battery production, the lithium producers' FY23 financials..,
Everyone can see that an unprecedented thing is happening...
As I explained on my previous post the EV sales all around the globe is increasing at very high growth rate. The definitive data is not available but we can see from the major OEM's data that it's going to be at least over 40%.
Just yesterday we got Chinese BYD's financial report. Their Q2-23 revenue is up 65% then Q1-2023 revenue. That is very high.
The battery production (and consumption) is also over 50% as I gave the SRE Research data on my previous post.
Now let's see what's happening at the lithium supply side.
IS THE SUPPLY INCREASING 40% TO MATCH THE DEMAND?
NOT AT ALL..!
ACCORDING TO MAJOR HARD ROCK PRODUCERS DATA IN THEIR RECENT FIN. REPORTS THEY WILL NOT INCREASE ANY MORE THAN 10% IN FY24 (Australian data)
Here is the data from the worlds largestb lithium mine Greenbushes. This is from IGO's recent fin. report.
The production in FY23 was 1,491kt. And their target for FY24 is 1,400-1,500kt.
Not much change isn't it. Maybe the same with FY23.
Also keep this fin. summary in mind because we will talk about the huge profits.
And second largest producer is PLS. See their production target is no more than 10%, maybe less or even maybe the same. Btw PLS only produces 5.3% spod.
The production in FY23 was 620kt. And their target for FY24 is 1660-690kt.
AKE's production in hard rock is too small to talk about.
When it comes to MIN which has Wodgina (JV with ALB. 40% share in FY23 but increasing to 50% in FY24) and Mt Marion (50% JV with Ganfeng).
MIN is hoping to increase its production around 25% but is that going to be realised really? Their spod grades 4% for Mt Marion and 5.5% for Wodgina! I don't it's right to talk that in SC6 equivalent spod as they reported.
Mt Marion FY23 149kt SC6 equ. (but they produce only 4%) FY24 190-220kt SC6 equ. (!!!)
As you can see MIN is selling dirt in Mt Marion.Mt Marion should have been finished its ore by now and closed, but they are still digging the ground and selling the dirt there IMO.
And MIN (and ALB) can't ramp up the production in Wodgina to its nameplate capacity and can't produce SC6 like PLS. IMO it's all because of the quality of lithium at Pilbara.
SO THERE IS A BIG PROBLEM FOR LITHIUM SUPPLY, AT LEAST FROM THE HARD ROCK SIDE (50% OF WORLD SUPPLY),
It's obvious that a huge lithium supply/demand deficit is coming soon...
The demand increase must be over at least 40% (very conservatively saying) but the supply is not going to be more than 20%.
I will also check the lithium carbonate production from brines in FY23 and guidance in FY24. That will only be SQM and Albemarle because they are the major supplier of it. Only from Atacama projects.
I'm sure Chinese is trying to extract lithium from its own salt lakes which has very low grade.
I don't know if these shorters don't know these numbers. They should now it if they are studying the supply side. Shorting all lithium stocks is not a good idea of course.
Anyway. Let's wait and see when the the deficit is going to be declared.
I'm tightly holding and waiting patiently as always.
Btw, when we look at the revenues and EBITDA's (net profit) of the hard rock miners, we can see their profits are astronomical.
Greenbushes Revenue: $10.5b EBITDA: $9.5b
PLS Revenue: $4.1b EBITDA: $3.4b
That is what Elon Musk said once: the lithium miners will have the profit margin of software companies.
LTR Price at posting:
$2.91 Sentiment: Hold Disclosure: Held
(20min delay)
