https://t.co/ayKFkdiBGX Lithium equities set for near-term...

https://t.co/ayKFkdiBGX

Lithium equities set for near-term re-rating on stronger pricing, says Canaccord
20th April 2018
Resources Rising Stars
Lithium stocks are set for a recharge in 2018, according to global stockbroker Canaccord Genuity, driven by stronger product pricing over the year.

“Lithium equities have significantly underperformed lithium prices for the year-to-date,” says Canaccord in a new specialty minerals and metals report released this week.

The report will come as welcome news to lithium investors, who have seen sharp share price declines on the back of renewed fears of near-term price collapses from oversupply – up to 38% according within Canaccord’s global coverage universe.

“Despite modest downward revisions to valuations, we remain bullish equities are set for a near-term re-rating on the back of stronger pricing over 2018,” Canaccord says.

“We estimate that ASX/TSX lithium equities are implying an average LCE (lithium carbonate equivalent) price of US$7,763 versus our 2018 forecasts of US$14,650/tonne and long-term price of US$10,950/tonne.”

The report notes increases in both brine and hard rock production, underpinning updated supply forecasts, but says that increased mine production does not equal supply of lithium carbonate equivalent (LCE) due to bottlenecks in converter capacity.

“Over-supply by the early 2020s is the Street consensus,” the broker says, “but we are more bullish in the short term.”

Canaccord has increased its near-term pricing forecasts and says that medium-term prices will correct, but not collapse.

@temperature,  While it’s fun to read the share price predictions from other holders, it’s always best to stay reality based, and work around current prices, when making trading and investing decisions. The 2H of 2018, should see some news in regard to an investing decision on SDV, and it will be interesting to watch how the market responds to this news, as to where Galaxy’s share price will end the year. 2018 is said to be the year of consolidation; acquisitions and mergers, and a re-rate of the sector. Interesting times for all lithium bulls.