A40 0.00% 8.2¢ alita resources limited

Sentiment getting smashed...

  1. 464 Posts.
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    Sentiment getting smashed again.
    https://au.finance.yahoo.com/news/buy-lithium-miners-galaxy-orocobre-024850724.html

    Why are the lithium miners being smashed?These lithium miners have been smashed over the last 12 months due to a collapse in the price of the white metal.Lithium prices have come under significant pressure due to increasing supply and lower than expected demand.In fact, demand has been so much lower that some companies have opted to hold back production in order to preserve cash flow.Unfortunately, for these lithium miners and their shareholders, one broker that thinks there is still more pain to come is Macquarie Group Ltd (ASX: MQG).According to a note out of Macquarie Wealth Management, courtesy of The Australian, its analysts believe there is now a danger that some lithium producers could go out of business in the near term.This is because there is evidence of a significant oversupply in the market at a time when demand just isn’t there.Speaking about demand, the broker said: “Not only [are] electric vehicles slowing but energy storage system demand contracting outright; not just hydroxide weakness, but also carbonate; not just a problem with salts, but also rock oversupply.”But knowing which lithium producers will fall from grace isn’t easy.It analysts added: “Our initial view had been that the large South American brines producers would be best placed to survive due to their costs, but that was on a carbonate basis, which is the lower priced material. Then we began to view the Australian miners with the foresight to build hydroxide plants as contenders too, but the delays to high-nickel cathode adoption has made this material’s demand less certain at least nearby, as we see from the price spread compression.”In light of this, I continue to believe investors should stay away from the lithium producers until supply and demand balance and there has been a sustained uptick in prices of the metal
 
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