Hey mate, the notion that AGY is significantly ahead of its peers in the industry seems flawed. Some argue that comparing AGY to current or recently launched brine operations isn't fair, citing differences in size and development stage. However, the same argument is used when comparing AGY to LKE, which is in an earlier development stage. This raises the question of who truly qualifies as AGY's peers and how we can accurately gauge their progress?
While AGY has made commendable strides in achieving early battery-grade production and expediting the path to manufacturing, I'm concerned about JZ's miscalculations regarding offtakes and strategic funding. Missing the opportunity to secure a favourable arrangement while the market was near its peak, rather than after an 85% price drop and entering the early stages of multi-year oversupply (as predicted by BMI), may lead to exploitative deals similar to SYA's spodumene offtake with PLL. AGY is particularly vulnerable to an exploitative offtake, as it's reliant on that party to provide the strategic funding.
In light of sustained low pricing caused by larger operators competing for market share (particularly in the Argentinian brine space), AGY might face challenges in generating meaningful profits over the next few years. Although there's hope for a turnaround, exploration companies commencing production from 2026-2028 might be more promising, at least IMO. Those coming online sooner (like AGY) could encounter a rough journey, as evidenced by recent challenges faced by CXO.
I'll just highlight this paragraph of yours: "Lithium prices are already causing concerns around the world with many producing companies at risk of uneconomical delivery, many soon to be producers with moderate to high opex, and high capex are at extreme risk of not producing anytime soon, as debt is deadlier in the current market than it has been for a long time."
I think you've hit the nail on the head, but unfortunately I think you've perfectly described AGY's situation.
Anyway, here's hoping for a quick turnaround. GLTAH
AGY Price at posting:
12.5¢ Sentiment: None Disclosure: Held
(20min delay)
