Bit of a pressure cooker, AJM would surely be feeling the pinch...

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24/12/19

08:22

Post #: 42112762
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Originally posted by Sjlasx: ↑

I see as expected Nemaska lithium has fallen over. Looks like the Palinghurst deal fell through.
What a monumental disaster that project has been. Mismanaged from the outset.
Was supposedly going to be the world's lowest cost Li Chemicals producer. Turned out their feasibility studies massively underestimated both Capex and Opex and they were engineering the plant while it was being built.
Also another case in point that Li Chemicals pricing has reached a level that is unsustainable for producers.
In WA alone this year we have seen PLS virtually put their mine on C&M and who knows the output of their plant, Bald Hill in C&M & now taken over, Greenbushes deferred a major expansion, Wodgina went on C&M just prior to expected ramp up, and GXY has already announced a reduction in mining of 40% and plant output of 25%. Many still expecting another producer to go under due to unsustainable debt.
Chinese independent converters are under enormous financial strain.
For those that keep banging on that pricing will keep on falling these are all the hallmarks of the bottom of a cycle.
If car manufacturers expect to reach their intended production levels pricing will need to rise to a point at which marginal producers can operate.

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Bit of a pressure cooker, AJM would surely be feeling the pinch with the debt hanging over its head. I kind of read it as good for GXY, in that the more projects that fall over/get mothballed the better their survival chances with a +ve bank balance.

GXY Price at posting: 88.5¢ Sentiment: Hold Disclosure: Held
2 Upvote

0 Great analysis

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