General Discussion AGY, page-13178

Extract from a recent Stock***d article ....


....

..... Garimpeiro is wondering if the sell-off has been overdone....

... The fall from a super-fantastic $US87,000/t to $US48,000/t in response to Chinese battery destocking ahead of EV incentives falling away is alarming all right. But there is nothing wrong with $US48,000/t. It might not be super-fantastic but it is still fantastic.

Even then, the $US48,000/t price quoted above is a Shanghai price and is not truly reflective of where prices are at. Dare it be said that the Chinese, through their state-owned enterprises, are playing games.

For instance, leading market watcher, Fastmarkets, had the price pegged at $US60,500/t on Wednesday for carbonate material, $US70,500/t for hydroxide, and $US6,100/t for spodumene.

So when the shorthand explanation for the sell-off in lithium stocks is that prices are down by 45% since November, don’t believe it. Fastmarkets’ assessment takes in prices in Japan and Korea, in addition to China.

If you think all that is confusing, it is. Suffice to say the pullback in lithium prices is real, but nowhere near as severe as some headlines suggest.

To be honest, Garimpeiro would only get concerned if prices for lithium carbonate were to fall below $US10,000/t like they did a few years ago. But that is not going to happen.

And in support of that claim, Garimpeiro points to the latest battery capacity tracker data from Adamas Intelligence.

It found that a massive 488.3GWh of battery capacity was deployed onto roads globally in newly sold passenger EVs of all types in 2022 – 70.2% more than 2021, and despite ongoing supply chain struggles and economic headwinds in all major EV markets.

The EV revolution is a juggernaut that cannot be stopped. And as President Biden noted after the Inflation Reduction Act was signed into law last year (it effectively gives EVs a $US6,000-$7,000 cost advantage), the “future of vehicles is electric.’’

So Garimpeiro has no concerns about lithium pricing. The supply challenge is huge, and to make sure demand is met, incentive prices well north of $US20,000/t for carbonate/hydroxide, and $3,000/t plus for spodumene, are likely to be a permanent feature well into the next decade.