General Discussion, page-784

At the risk of being a Downer, I view this offtake agreement as very negative for future lithium prices.

My thoughts on it:

1) It’s possibly quiet acknowledgement from PLS that over the next 2-3 years they can’t meaningfully progress further downstream outside POSO JV and remain competitive.
2) They are worried about oversupply and would rather sell into contract than further crash the spot price by selling a a large volume at spot.
3) Possible overconfidence in price recovery and they have been outmanoeuvred by their offtake partners.
4) If they were in such a strong negotiating position because of genuine fears in China of an impending lithium undersupply, I would have expected PLS to have been able to lock in a minimum floor price slightly above their cost price, and also have pricing subject to market rates above that.

Lucky for us we have our brines.