Good News & Bad News, page-566

There is an oversupply atm, why?

There are multiple reasons;

When the Li miners announced construction or expansion plans back in 2017 the global economy was booming, consumption was strong, a perfect evironment for EV's to start making their march forward. Leap forward 24 months and global growth has peaked, and now slowing, magnified by US/China trade war. The longer the trade war continues, the more it extends the drag on economic growth. We have entered the early stages a the new business cycle, where interest rates are now falling in an attempt to stimulate economic growth and/or slow any rate of decline. Eventually, falling interest rates will stimulate growth, and the "good times rowl" again.

As a result, the demand that was expected for 2019/20 back in 2017 is clearly not needed today, which ALB has confirmed this week. Therefore, we have an overhang of supply that needs to be cleared, once converters catch up.

I could go on, but there's clearly less than ideal economic conditions ahead. So, the artcle in my above post is basically stating that due to said economic conditions, fewer new mines, expansion plans and conversion capacity will be financed in this environment, which will lead to shortages down the track, which in turn will slow EV adoption rates. Remember, most credible analyst outlook is 1 to 3 years, and not 6 months.