...so Carlos Zuleta does not agree with the 'temporary oversupply of lithium' take of Joe Lowry, which is so often quoted by lithium hodlers.
...EV demand growth over next 1-2 years will decelerate to require less lithium at a time when present oversupply is just about enough to result in a lithium balance so prices won't go anywhere, not higher but not much lower either. And when EV demand growth gains more traction in 3 years time, we should expect more supply coming onstream from developing projects in the works, so there will still be no imbalance, helping lithium price to remain steady at present rate, if not just slightly higher.
...with little chance of a material lithium price recovery in the near term, we should expect the market to start losing hope of a 2nd half recovery witnessing stable lithium prices despite higher EV growing coming from China. The market starts to discount lithium premium further and more market participants start to sell fearing more losses ahead. The longer they procrastinate, they get into a position that they lock themselves in to wherever the market takes them to....and in a potential recession, that could be a large move down. Lithium hodlers who stood married to their stock, do not know how to sell first to buy back lower, because they love their stock too much.
...ask a CHN holder who may have bought the stock for under $1, rode all the way up to almost $10 and would not sell until the company goes into production, if they regretted staying put to hold all the way back down to $1+, losing all their 10 bags. They would say they still make 30% despite holding for 4 years, losing out to a trader who could have bought in Sep21 at $6.69 and sold 2 months later for a 56% gain.
All time view CHN Stock Price and Chart — ASX:CHN — TradingView
RESOURCE STOCKS ARE CYCLICAL ! THEY ARE CONSTANTLY SUBJECT TO BOOM AND BUST- THEY'RE NOT YOUR WARREN BUFFETT TYPE STOCK WHICH GENERATES PERPETUAL AND CONSISTENT CASHFLOWS. YOU BUY THEM AT THE RIGHT CYCLE OF BOOM AND GET OUT BEFORE THE BUST.
SO BUY AND HOLD AT YOUR PERIL.
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Those "analysts" have no clue about the #lithium market. They implicitly assume that Li oversupply is a temporary phenomenon. In contrast, I explicitly argue that it is a structural factor that can be taken care of only through massive demand not to hurt Li prices.
