General Discussion, page-3696

Strange beast the market.

Yesterday Lithium stocks were on the nose - a sea of red. That followed the US market which saw a lot of red over the report CATL had dropped prices.

The US markets were closed last night, so you'd expect our Lithium related stocks to be flat - around the same as yesterday.

But no, we're a sea of green today.

Just maybe the market over reacted to the CATL report. CATL dropped prices to some of the smaller struggling car manufacturers to help them along. The much bigger Tesla & BYD (paying full price) are doing very nicely thank you very much. Tesla afforded the luxury of raising prices in China.

Just maybe this action by CATL might stimulate demand, stop a few smaller car companies being uncompetitive.

CATL have very healthy margins and can afford to do this, they're asking their own suppliers for a 10% price cut. For that to happen it has to go completely upstream to the Spodumene & Brine producers. Most of that is on contract pricing, set by a formula. What's left over is sold on the spot market - do you think PLS is going to discount it's BMX auction or it's latest tolling arrangement to help the Chinese out who blatantly manipulate the market - no way!

Then in today's Fin Review an article on BHP saying China's rebound will be "revenge spending" rather than into the steel hungry property market. Revenge spending to me includes EVs.

Stock prices will go up & down often influenced by an irrational market & of course distorted by the big funds, short sellers such as Statestreet.
As an investor all you can do is go by what the experts (such as Benchmark, Fastmarkets) say about supply & demand. On the macro side you can see how many Tesla's are driving in your neighbourhood (you probably don't notice the other brands), how many battery gigafactories are being built etc etc. Then long term it comes down to economics 101 - supply & demand.