Quite frankly, the lithium price does not concern me. Because...

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PaddyMac33

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03/04/23

13:11

Post #: 67104774
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Originally posted by 1ronnie: ↑

Quite frankly, the lithium price does not concern me.

Because many lithium companies can still make good money even with lithium price falling further.

My exposure is less on the producers than on the explorers and forthcoming developers.

For the developer group, their projects would remain reasonably good even with LCL price as low as US$20k, so LCL could well IMO sink another 40pc before their project economics get impacted. And as for explorers about to show their resource estimates, their valuation can only go higher because they have had taken a huge hit on their share price to date.

Basically to me, the Albemarle super premium bid for LTR has placed a floor on the stock prices of lithium stocks. And from a risk-reward perspective, more upside potential can come from (1) a possible bottoming in the lithium commodity price (2) potential M&A activities but more importantly (3) a revision in the valuation of lithium stocks based on the bullish determination of the industry's biggest player.

Finally, a recession is unlikely to be the setback on lithium because there is considerable demand pipeline for EVs due to the transition from ICE vehicles, lithium producers would be more worried about the production capacity of EV manufacturers and their willingness to produce more. For lithium stocks only producing 2-3 years down the line, it may not be as much of a concern if we can get out of the recession by then.

And we have to admit that in the face of a likely rally in the stock market, the lithium sector would continue to be front and centre of market participants minds.

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Quite frankly, the lithium price does not concern me. Because many lithium companies can still make good money even with lithium price falling further.

Yep replace the word lithium with coal or oil and its basically the same thing.
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0 Great analysis

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