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Nanood

7,791 Posts.

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28/06/19

15:33

Post #: 39290659
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Originally posted by Sjlasx ↑

I thought I'd give a rather more detailed update on Chinese converters, Australian spodumene production and future supply capabilities. Also noone should be underestimating the Yahua converter that has just come back online after 12 months of upgrading. They will rely heavily on GXY for spodumene. Excellent news.

Here is a map of China showing the locations of converter facilities and their preferred raw material. GXYs main customer is Yahua which focuses on spodumene conversion. I don't read Chinese however I know ShanDong RuiFu is a major spodumene converter but I don't see it listed on the map.

Here is a diagram showing spodumene offtake partners. Note Yahua and RuiFu are listed as the main GXY offtake partners. GXY is secretive regarding their other offtake partners. My understanding is Yahua has other offtake partners without currently producing mines ie explorer CXO. With their just announced completion of massive converter upgrade this is excellent news for GXY and could continue the tradition for GXY to receive above average spodumene pricing.

This graph shows the state of Australian spodumene supply with forward estimates. It demonstrates that by 2021 it is expected that Australian spodumene supply will be at 420kt LCE. This doesn't include rest of world production of South American brine. For those of you looking to understand how supply could meet 2025 demand for 1mtpa LCE, this goes a long way to providing an example. The graph also demonstrates that when prices fall due to oversupply increased production is delayed.

Here's another SMM quote. It explains why spodumene is highly sought after and bodes well for the future of the likes of GXY.

DYOR

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“GXY is secretive regarding their other offtake partners.”

Wouldn’t that contravene rules of disclosure?

GXY Price at posting: $1.23 Sentiment: Hold Disclosure: Not Held
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0 Great analysis

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