...everything that is said in this article reflects what I have been saying for some time now on this thread.
...Aussie lithium miners' lunch is about to be eaten by South America and Africa who certainly can produce lithium more cheaply than us.
...at $1000/ton, LTR could be in for a $60mil annual loss for 2025! How would it be able to generate cashflows to meet its financier's needs?
....Lithium Hodlers, this is a big WAKE UP call. When people had to chance to sell into strength and they don't take it, but instead continue to buy the dip, adding to positions i,e double down, they are simply exposing themselves to greater risks in a sector that is expected to go through a few years of winter hibernation.
...the speculative exuberance continues to be still strong, when both PLS and LTR dives further, a wave of selling across lithium stocks is to be expected. It will only bottom when both bottoms and stay down for an extended period. Albemarle improves auction sale price but lithium outlook is getting gloomier as supply piles up
Adrian RausoThe West Australian
Thu, 6 June 2024 4:00AM
China’s supply stream of the lithium needed to feed its battery manufacturing network is swelling Credit: Talison Lithium/TheWest
Dark clouds are reappearing over Western Australia’s lithium miners just as it appeared the storm had been weathered.
US giant Albemarle, which has a major lithium presence in WA, last week purportedly auctioned off 16,000 tonnes of spodumene concentrate for $US1210 ($1818) a tonne.
This price excludes taxes, The West Australian understands, and is based on a 6 per cent grade spodumene concentrate product being exported to China.
The sale was an improvement — albeit marginally — from the $US1195/t Albemarle fetched for an equivalent 10,000t of spodumene sold via auction in March.
The latest auction also seemingly marked another step towards a market recovery for the battery ingredient, which slipped below $US900/t in January following a sustained slide.
But clear skies on the horizon are looking increasingly unlikely, according to recent analysis.
China’s supply stream of the lithium needed to feed its battery manufacturing network is swelling, even from sources within its own backyard.
UBS told clients on Wednesday it recently hosted a call with S&P Global Platts to see how traders and price reporters are seeing the lithium market.
Traders and price reporters play a pivotal role in gauging the state of the lithium market, which is notoriously opaque and lacks a centralised trading platform unlike many other commodities.
“Overall their feedback was incrementally bearish short-term prices with weak demand, robust supply growth and lower cost support,” UBS said.
Stockpiles of African spodumene and Chinese lepidolite are growing strongly in-line with expectations, UBS said, which could spell bad news for Australia’s spodumene producers.
“We forecast lithium prices to trade range-bound near term with spodumene expected $US1000 to $US1200/t for the remainder of the year versus spot $US1160/t and consensus of approximately $US1230/t.”
Most Australian lithium mines, which are almost all located in WA, would either be losing money or barely scraping past breakeven if prices slump back to $US1000/t.
Australia is currently responsible for about 55 per cent of China’s spodumene imports, which has been a relatively static portion since the start of the year. Virtually all of Australia’s lithium exports are shipped to the Middle Kingdom.
But Brazil and Zimbabwe are set to grow their slice of the China supply pie, according to UBS, and in a research note last month Citi highlighted that Canada is bursting onto the scene as a major exporter faster than anticipated.
Citi also believes the supply glut is flowing through downstream, which offers another forward-looking indicator for WA’s lithium players.
“Our channel check with ZE Consulting suggests that lithium should see a elevated oversupply (for May),” Citi said in a research note late last month.
“Yichun Mining completed its auction . . . the first time Chinese lithium smelters held (an) auction for lithium carbonate, indicating a sluggish spot market.”
On the same day the March Albemarle auction cleared, Mineral Resources chief executive Joshua Thurlow said his company had “recently” sold spodumene concentrate at $US1300/t.
Meanwhile, Pilbara Minerals chief Dale Henderson told The West in April that the price range for spodumene was sitting between $US1000 and $US1300/t, depending on which buyer was at the other end of the phone.
