Banter and general comments, page-37962

The primary mistake was believing the commentary from experts that basically all the projects that had made a FID decision by April 2023 would only meet supply. While the experts had good visibility around western projects they appeared to have limited visibility about what was happening in the African, DSO / lepidolite space and also whether it was inventory build or shrinkage contributing to the price movements.

There were expectations being set that this very high price situation was going to last many years, not a matter of months. As an example, GL1 had a scoping study released in Feb 2023. The price forecast below was part of that study. At some point in the leadup to this study Fastmarkets were forecasting SC6 to remain above US$2,000/t for every year through to 2030. The 2024 and 2025 forecasts were above US$5,000/t.

Fastmarkets would have struggled to get the 2024 element of this forecast more wrong if they tried.


An equivalent but reverse mistake may be in the process of being made. That new mistake is believing that the current lower price situation will be maintained for an extended period meaning there is limited value in companies with a cost structure closer to the current prices. Demand is still growing rapidly and previously commenced projects are progressing to meet that demand. The number of new projects commencing construction is below the levels to provide the supply growth needed for the later part of the 2020's.