Is there too much Lithium in the future ?, page-8

In 2007, the same analysts were talking about a pending oversupply of the iron ore market with 2009 being the year most analysts/gurus were expecting oversupply and falling prices. They were wrong by almost 6 years. Two things they underestimated - demand and time to get product to market (typical lags associated with planning delays, hurdles in plant construction, etc) . Yes, the big 4 - BHP, RIO, Vale and Fortescue were ramping up production but the process took much longer than the analysts had foreshadowed. I think we'll find lithium supply will not ramp up as quickly as Citigroup expects and we'll be in a supply deficit for some time. Also note Citigroup's concluding comment: "if all current lithium projects proceed as planned.................by 2020, creating a bit of an oversupplied market". It's like me saying if i lose 2 kilos consistently every month, I'll be 24 kilos lighter by end of year. But will it happen? What's the bet we won't see an additional 330,000 tonnes of supply by 2020. And being your devil's advocate, even if there is an oversupply by 2020, PLS will be fine provided we come on market in late 2017, early 2018. Also, remember the company's DFS (I presume will also be the case with the PFS) is based on significantly lower lithium prices than the current price. In other words, it's based a price assumption that is likely to resemble a slightly oversupplied market post 2020 or 2021 than the current situation an likely price scenario for the next 4-5 years.

Just my thoughts for what they're worth.