Just having a read on LinkedIn		 Matt Fernley Currently...

Just having a read on LinkedIn

Matt Fernley
Currently MD at Battery Materials Review and Head of Research for Westbeck Capital's Volta fund.

I'm hearing that weakness in #lithium stocks today is down to notes by a number of investment banks and dealers suggesting that the results of BMX auctions by Pilbara Minerals Limited are not indicative of the wider lithium (SC6) price. The brokers note that the 16 November auction price of US$8575/t SC6 equivalent (on a CFR China basis) is only for a 5Kt package and is not comparable to contract tonnage. Well, derr!

Nobody in the industry has ever claimed that BMX prices are in any way comparable to contract prices. Only non-experts looking into the industry from outside have suggested that. The key point about the BMX auctions is that they generally lead the SC6 price by a few months, so if BMX is indicating prices around US$8575/t now, and contract prices are around US$5000-6000/t then the suggestion is that prices will go higher.

And the other key point is that BMX is showing the huge demand for lithium units that currently exists. BMX auctions are for 5.5% material, below what has traditionally been the benchmark grade, yet still in demand. The fact that Core Lithium was able to get such a high price for a 15Kt DSO (direct shipping ore) package at 1.4% Li20 also attests to this huge need for lithium units. That's not indicative of an industry that's about to melt down...