Banter and General Comments, page-9335

So while we wait for the next 48hours to present itself and hopefully receive some news that puts us on the right side of the trade lets look at some insights on how the sector is headed.

First it appears the battery sector is not all doom and gloom.

We have Contemporary Amperex Technology Co. Ltd., also known as CATL, the world’s leading EV battery maker report that its revenue more than doubled in the first half of the year, while its profit rose by 131%. In the past twelve months, CATL has greatly expanded its production. According to the quarterly report, the capacity of the Chinese plants is now 30.0 GWh – compared to 13.8 GWh a year ago. So it is very clear here that a successful spod story is one linked to the majors.

We also learned today that outside of China, prices are not doing too bad.

We also can see the pace VW planes to roll out cars with production starting very soon.


Now Tesla's new China plant will also be starting up later this year so it is very highly likely that we can take this chart and multiply it by 2. So how much extra spod is needed to produce say an extra 450,000 cars in 2020? Let's not forget what else everyone is doing. Next year we will see a strong stream of hybrids and BEVs come to market.

We also learned that China is happy to keep rejigging incentives to ensure its long term EV policy plays out.

In recent days we have also learned that some mines are going to need to cut production and some juniors are dreaming of getting the finance deals needed.

We have SQM say hey we will increase production by 30% (how) and ALB say hey we are getting inquiries for 3-4X more liquid gold next year.

So this short term glut is here and before we know it, it will pass. When it passes A40 supply will hopefully be in our hands (we will find out soon) and instead of waiting 2 years to increase revenue and profits they will simply be a short drive down the road away.

All speculation, but its better to think positive thoughts then negative ones. What is life if we can't think BIG!

Time to wait and see if excitement or disappointment awaits. Even if it is disappointment we just need to remind ourselves of everything I just mentioned above.