Question...if there was no binding off take would that also...

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Timmmy

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14/06/21

08:12

Post #: 53826091
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Originally posted by Kiwisfly9: ↑

Ok, spitball theory here.

I'm going to go ahead and say that I think we might not be seeing an off-take binding until mid to late Q3.

The reason isn't because we can't sign now. I think we could probably lock in our DFS figure of 690 USD a ton right now if we really wanted to but because we know that EV production is ramping up majorly not only in China but also Europe this year, we can command a higher price. Despite this, there is still a little bit of a price lag in terms of us getting over the 690 USD mark and deep into the amounts we really want to lock in as binding and I think it could be coming sooner rather than later......

Most factories in China seem to have about a 3 month supply of spodumene from what correspondence I read (at least this was the amount quoted when we were experiencing the lows of the lithium market last year from the glut that existed) and given that we saw prices absolutely take off for about 3-4 months but we have only seen prices go up 2.7% in the last 60 days, I am thinking that some of those chemical suppliers are going to potentially need more spodumene soon as additional demand for batteries will be building in places like Gigafactory Shanghai and Gigafactory Berlin.

Additional chemical plants processing capacity are either online and ready to pick up some of that slack to meet demand (as long as they can actually get the spod) or coming online very soon to meet demand but whatever way you cut it, they will need the spodumene as feedstock to make these batteries to make a profit. Otherwise, high-tech chemical and battery-making factories lay idle. As the demand grows and those stockpiles potentially dwindle with we might see some serious price movements start up again in possibly the coming month as pressure builds for chemical processors to compete to meet demand.

Thoughts??

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Question...if there was no binding off take would that also effect the DFS ...you need the binding first followed by the DFS ?...thanks

CXO Price at posting: 25.5¢ Sentiment: Buy Disclosure: Held
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