The PLS share price is playing catch up to the rest of the...

The PLS share price is playing catch up to the rest of the lithium stocks. Up until recently, PLS has weathered well relative to its peers. It was only a matter of time until the floodgates opened. Sooner or later the share price needed a reality check and reflect fundamentals.

If you want to play devil's advocate, this could actually be a good sign. When the last of the big producers is finally in the firing line, that could signify a bottom not being far away. How much longer can the big producers continue producing at a loss? Something's got to give. So far current production rates haven't been rationalised to adapt to demand. Producers have been their own worst enemy by failing to curb supply in an obviously oversupplied market.

African supply is the real worry, however. There's clearly been a big ramp up of supply. You can dismiss it as being an inferior product to Australian spodumene, however, the Chinese have obviously got ways to work with it. The spot price of spodumene has been under US$1k/t for the best part of 12 months, yet African supply keeps ramping up. High cost lepidolite producers stopped producing once price went below the production cost. Yet African supply hasn't stopped and is actually ramping up. Make of that what you will.