Interesting stuff. The big dogs pulling out as the tide recedes is enough to cause some havoc regardless of business prospects which is always the sad reality we need to come to terms with. A time will come again when it's "stacks on" and big dogs are desperate to get in.
FYI everyone - dirty Joe Lowry's latest podcast episode is actually pretty good. He had an analyst on there from Fastmarkets, who provide transparency on lithium pricing. This analyst has a looooot of exposure and insight into the current market forces.
The analyst said that demand was up y.o.y in Jan, Feb but wasn't as much as expected due to end of rebates in china, high interest rate conditions, natural seasonality (Q1 is the lowest), general destocking, and basically the lithium prices going down has caused an effect where no battery maker wants to buy ANY lithium because they would rather work through their stock and buy later only when they absolutely have to when lithium prices are lower as a result of no one buying because they're all working off that same philosophy. Combine this with CATLs 200k yuan price referencing and this makes a lot of sense.
The analyst said pricing is expected to bounce back around June 2023, in a U shape (not a V) as battery makers are forced to restock. Longer term pricing expected around 200k yuan+ (30K USD) and upwards, which is still very high.
They also said even at 200k yuan, there are a lot of VERY high cost lithium methods especially in China that will no longer be profitable and will help diminish the supply side.
Interested to see how high spot will go again when restocking needs to be done.
AGY Price at posting:
42.0¢ Sentiment: Buy Disclosure: Held
