An article that suggest lithium mightn't be so good short to...

An article that suggest lithium mightn't be so good short to medium term - but that's OK for the patient.

Hope it helps - this might be why TG has fast tracked KV



You’ve Got 10 Months to Get out of Lithium Stocks

Thursday, 21 November 2019 — London, UK By Sam Volkering

In today’s Money Morning…over the last two years all the heat has come out of the lithium market…it’s going to get worse before it gets better…the long game is still there…and more…It’s fair to say the heat has come right out of the lithium market. And I’m here to let you in on a secret…it’s only going to get worse.If you’re holding bags of lithium stocks in the hope that things will only get better. Well, sorry, there’s a good chance they won’t.This means you’ve got a decision to make. And you best make it now. If you wait too long, if you wait just 10 months longer, then I fear it may be too late altogether.

In my view, there’s far more coming pain for lithium stocks.Some of them may be forced into a change of direction. Some may end up in administration. Some may just end up as a holding vehicle until they can recapitalise into a new boom area like AI, wellness, fintech, or something else that could resurrect value.Many are going to see more pain in the next year.Yep, called it - Lithium batteries are a significant technology development. But they’re not the silver bullet for the world’s pollution problems.The great silver hope isn’t lithium. Not to the extent that punters have made it out to be. I don’t doubt that we will continue to see more electric vehicles hit the market with lithium batteries. But not at the volumes you expect. And not as the only ‘green’ power option to choose from.One of the reasons that the lithium boom just isn’t there is the fact that supply is readily coming to market from the like of Albemarle.This isn’t any great shock. On 31 March 2016, in a Money Morning article titled, ‘Why I’m Not Tipping Lithium Stocks’, here’s a part of what I wrote:‘…while there is an increase in demand for Li-on batteries, there’s more than sufficient supply to meet this need. More importantly, the major lithium producers in the world can meet any demand increase with ease.‘As recently reported by Bloomberg:“If all current lithium projects proceed as planned, they would deliver about 330,000 tons of lithium carbonate-equivalent by 2020, creating “a bit of an oversupplied market,” according to Citigroup.”‘Australia is the world’s largest lithium-producing country. The single biggest known lithium reserve in the world is ‘Greenbushes’ in WA. This mine, however, is jointly owned by two of the world’s big lithium companies, Chengdu Tianqi Industry Group (China) and Albemarle Corp [NYSE:ALB]. Tianqi owns 51% and Albemarle 49%.‘These two giants control a massive chunk of the global lithium market. Other majors include Chilean Sociedad Quimica y Minera de Chile [NYSE:SQM] and FMC [NYSE:FMC].’I was crucified by lithium fans.Here’s what one poster on a HotCopper forum had to say:‘Meanwhile over at Money Morning they are talking down all Australian Lithium Stocks...‘Check out this laughable quote. Why would anyone take this guy's advice? (Sam Volkering)‘"Now, it would have been nice to get into these junior lithium miners in the early stages of that hype cycle. General Mining is up 533% in the last year — 476% in last six months alone. Pilbara is up 826% in the last year. Admittedly, I missed both of these companies back in mid-2015.But there are good reasons why I’m not tipping lithium stocks today."‘Clearly, he's heavily into the majors and doesn't want anything disrupting that…’Here’s another happy punter’s strange analogy:‘What are his good reasons for not tipping lithium stocks today?‘There is always a comic relief in a movie that just doesn't get it and claims that there won't be an earth quake for instance and when it does happen are clinging to the leg of our hero's girl as a deep crevice opens beneath. But she just kicks him away with her manolo blahnik and says, "you should have listened to John" (her partner who the comic relief always came to blows with and called his claims ludicrous) as the crowd cheers he falls away like Hans ***er into what looks like a never ending opening in the earth.‘So yeah, what were his excuses for not liking lithium stocks?’It's worth pointing out when I wrote that article on 30 March 2016, lithium stocks were on fireilbara Minerals Ltd [ASXLS] was trading at 44 centsGalaxy Resources Ltd [ASX:GXY] was trading at $1.32Infinity Lithium Corporation Ltd [ASX:INF] was trading at 11 cents, andVolt Resources Ltd [ASX:VRC] was trading at 3.4 centsThese are just some of the lithium stocks on the ASX, but most share a similar path.At the close yesterday (20 November 2019), these stocks were trading atilbara Minerals — 29.5 centsGalaxy Resources — $1.015Infinity Lithium Corporation — 6.3 cents, andVolt Resources — 1.2 centsOver the last two years all the heat has come out of the lithium market.The lithium giants like Albemarle are now even considering reducing output to try and steady market prices for lithium.