"The two big battery producers have every reason to run lepidolite at a loss to keep the price down. You want to keep the couple hundred thousand tons in the market, even if your taking a small beating, because the small beating your taking on the lithium side is much more made up for in the fact that the rest of the lithium your buying stays at a lower price!"
The loss from lepidolite is covered by the lower price of Li can happen only if the end product (batteries) is sold at the same price as when the price of Li was much higher. But batteries have been getting cheaper and cheaper. So it is doubtful that what joe Lowry said is right.
Joe Lowry doesn't know the truth. That is why he was wrong on when the Li price would "recover". He just guesses like everyone else. Does he ever provide the data for lithium production from lepidolite by CATL or BYD or other producers? Are the data available at all?
And why would CATL and BYD be willing to make a loss to suppress the price of Li when that would benefit other battery manufacturers (their competitors! from China, Korea, Japan etc) to pay less for Li without any sacrifice?
That doesn't make sense to me, Joe!
"Now what that’s doing is setting up the next big bubble of course because that swing capacity has limitations. But that’s a couple years down the road and they’ll deal with it then.
But they caused the problem in the first place with the spike, and what your seeing is the solution.”
What Joe Lowry implicitly said above is that CATL and BYD have a short sighted business strategy. That shows that he doesn't know and understand the paradox in Chinese culture. In their Arts, the evanescence of life is an ever-present theme. But perhaps because of the realization of how transient life is, the Chinese people want to leave a legacy behind. So they, from head of the family to head of state, make a long term plan.
CATL and BYD would never do anything to cause the price of their supply of materials becoming volatile, because that will not be in their own interest. Companies like them want to have a steady, predictable, and realiable supply of materials, just as mentioned by Ken Brinsden in the podcast posted in this thread recently by @dfs1 (if I remember correctly).
Volatilty is only good to big traders of stock and future markets. And NOT to manufacturers!
Joe Lowry should have known better! Or perhaps he is in the big traders' payroll?
PLS Price at posting:
$3.06 Sentiment: None Disclosure: Held
(20min delay)