" if China does have the vertical integration which allows it to offset mining losses further downstream, cathodes, batteries, evs etc"
Can't you realise how stupid thing would that be that you would produce lithium from your mine at loss and say yourself "I'd offset that loss at the downstream level"?
Why would you do that? No ones does that. It's not business but stupidity.
But yes, you would do that for manipulating the material prices and push your suppliers.
But how long could you do that? Infinitely? Of course not.
Why China can't do the same thing in steel manufacturing?
Yes, they did in the past. But then they surrounded.
They even won't try it anymore.
They have the iron ore mines, they have steel making plants, they use the steel in everything, including EVs, buildings, you name it but paid US$1.5 trillion to Australia.
Then why couldn't they use their iron ore their vertical integration of steel supply chain?
I'll answer for you.
Because they needed huge volumes of iron ore. It is a mature market.
The big steel makers wouldn't be able to play games with their suppliers. They just need the stable supply of steel for keeping their business going on. That is called
"THE MATURE MARKET"
Lithium market has been an immature market so far, but it's growing up faster expected.
They have manipulated the lithium prices so far but they do not have much time to do that. They did it because the lithium market was
"IMMATURE". But now it's changing.
The battery companies are getting bigger now. The EV companies are getting bigger too. CATL, BYD, etc. Not to mention the Japanese and Korean ones, they are already mature companies.
CATL and BYD have been immature companies so far.
These companies grew very quickly into a very fast growing immature market. They are the ones which manipulate the lithium prices. They are both quite new companies.
CATL was founded in 2012, only 13 years old. They initially manufactured lithium-polymer batteries for phones and small gadgets.
BYD was founded in 1995, 30 years old. But not started as an EV maker of course. They started business by making rechargeable nickel-cadmium (NiCd) batteries for phones and computers.
Now things are changing quickly.
Those CATL, BYD, etc need to act as mature companies
I'm nearly sure the owners of these two big companies are making mistakes together with the CCP.
Actually China itself is an immature country in the world economic system. All of their business people are new to the capitalist system. They are stuck between the CCP and the capitalist system. You know the story of Aliaba's founder Jack Ma. Tragic..!
EV MARKET IS ALREADY MATURE NOW
That is the most important point. When a market is matured, it will automatically kick out out the immatures, or make them matured.
EV penetration rate is over 20% now, which means 21m+ EVs will be sold this year. (Annual vehicle sales of 90m in 2025 including ICE vehicles).
In 2030 the EV penetration will be 50%+.
It's already 53% in China.
And it's not only about BYD and Tesla, you know that. There are a lots of Japanese, European and American cars are now entering the market. China's share will be cut down every year.
Here is table I have made and posted here before
Do you know what all these mean?
They need lithium.
And they need a lot of it.
So simple.
(20min delay)