Good News & Bad News, page-20834

Wouldn't worry about anything that Jimmy posts, as we all know it'll be negative. But, if one takes the blinkers off, expands the view, carbonate prices have not fallen y-o-y, yes they are down in December 22 on November 22, but up on October 22.

Carbonate prices since 1 October 22, all in US$,

1/10/22 - $74,000
15/11/22 - $86,000
23/12/22 - $77,000 - So current prices are up ~4% on October, down ~10.5% on November, and up 120% y-o-y as of 23/12/22 ($35,000 as of 23/12/21).

October spike due to restocking, which I understand said restocking carries converters through to CNY holidays, with many converters using the slow January period for maintenance shutdowns, so there's no restocking in January, a lower/slower demand period.

This is just carbonate prices, Hydroxide price still over $80,000, spod contracts at $6,300 (AUD$9,420). I think its important to remember the above are spot market prices, and only ~10% of the market is buying at those prices, for example, average carbonate import prices from South America were ~$60,000 in November, a mix of contract and spot sales.

All of the incumbent producers have renegotiated there contract pricing mechanisms, which lag spot prices by up to 6 months (PLS is 2 months, from memory), so contract prices will keep rising, spot is falling atm, so the two will converge, maybe in Q2 23CY. However, if spot stabilizes sooner, after CNY, contract prices could keep rising throughout whole of 23 CY.

I reckon incumbent producers will be chomping at the bit to report their new contract sale prices and volumes to market throughout January, that will be hard for Mr/Mrs market to ignore, and commentary wrt to forward pricing will be interesting.