Correct me if I'm wrong , but I seem to recall the 2018 - 2019 downturn in Lithium pricing was results of too much downstream chemicals capacity relative to the available spodumene coming through , and now what we have is a period of time where we have too much spodumene for the current available downstream processing capacity .
So we have this dichotomy of relationships between the lithium battery supply chain requirements of lithium being driven in part by the cyclical macro economic supply and demand issues of the EV manufacturers who are now saying that at least in the US , the emphasis and forecast are still for a prolonged period of Hybrid vehicle manufacture and not straight up EV's.
So the answer to our problems clearly lies in the expected widening in the differential between Li concentrate pricing and carbonate and/ or hydroxide pricing, and which really should be a no brainer and expectation given the investment required is significantly much greater.
And this as we all know has been a primary function and concern over the last 12 - 18 months given the less capital intensive concentrate which has attracted relatively higher and more attractive pricing than the required increase in investment for chemicals - hence the stalling out of enough capacity for the increased concentrate inputs.
So we are currently still hostage to this cycle until we can attract not only the necessary downstream investment in chemicals , but the NORTH AMERICAN market presence of downstream lithium chemicals production.
And therefore so long as the economic climate continues to lend itself to these market dynamics and priorities , the pro chemicals arguments for fast tracking particularly at home half built Carbonate facilities becomes even more compelling.
There are of course better ways as I have eluded too.......and much fast than perhaps building out our own HALF build carbonate asset.
Remembering as well that it was Musk who said that ' Tech Profit Margin ' were definitely there for anyone who dared to venture into Chemicals.
So even the Big knobs can get it wrong. What about Buffet who virtually sold down his stake in BYD over 11 transactions last year and late the year before whereby BYD is now trading much higher.
O.K , granted he made a bundle , but his ( Buffett's) and Munger's reasoning's were that he didn't want to go against Musk head to head.
And so no wonder it becomes increasingly difficult to believe in what anyone says..... Even these Guy's.
(20min delay)