@dynofish
I watched that webinar. It's a long talk (1 hour 45 min) held by the SMM London. Lithium talk is at the end and very short. There was no insightful thing for me there. There were a lots of wrong things as well. SMM's analyst data must be outdated.
Here is the link if you want to watch its replay. (You need to be registered). But it's not worth it IMO.
"
SMM ONLINE WEBINAR: Navigating the Commodities Landscape in the Energy Transition: Short & Medium-Term Investment Insights"
I have also got that cost curve given on the webinar, and tried to analyze it.
See the cash cost curve below. I have put my notes and marks (some marks are mine).
They say this is cash cost (depreciation and operating costs are not included). I'm not so sure what they mean.
I dropped down the left axis 8000 RMB to include all costs for making it ASIC cost. (see the original cost curve below the one I marked).
I put the red line at RMB 60,000/t which is the current lithium carbonate price.
As you can see S
QM's and Albemarle's Chile Atacama resources are the lowest cost projects but even they are sitting on a cost of RMB 40k/t. (SQM: 180kt-200kt, ALB 70kt-80kt, Greenbushes 180kt-200kt LCE)
Salt lakes in Argentina don't have that much production yet as shown on the chart. They may be wishing for it. The real production is no more than 60kt LCE from Argentina for 2025 but it shows more than that on the chart.
We know ell that the salt lakes in China have the lowest cost lithium carbonate production in China. The Chinese gov company owns most of the project around Qinghai lake, they use semi DLE production which is very dirty (producing hydrochloric acid) and very expensive.
Even though though they use near-slave labour at the area the cost is still being too high.
See where they are on the cost curve, close to the sale price.
Spod from Brazil is around 350kt spod at 5.3% grade and is being only 45kt LCE. It comes mainly from Sigma mine and its cost is much more than LTR's cost. (I put its own cost tables before).
You can see where the other Australian spod production sits at. It's sitting at sales price.
And same thing is valid for the
Chinese own spod production.
It's at the sales price.
African spod production cost is over the sale price as well.
When it comes to
LCE production from lepidolite in China; The cost price of majority of them over the sales price. It's being done at loss..! It's clear here.
One thing is quite correct here on this cost curve; it's the total production of LCE which is at 1,500kt for 2025. I told the same number many times before. (It's shown much more in some exaggerated cost curve graphs, even over 2,000kt).
The result is;
- China can't make any economically viable lithium carbonate production from its own lithium resources.
- 50% of all resources are making production at loss at the moment.
- The Chinese lepidolite production is being done at massive loss.
- The total supply is 1,500kt. We know the demand is around 1,500kt as well. So a very little disruption in supply will cause a big problem for the demand.
The chart below is the original one.
The demand is underestimated on all forecast while supply is overestimated as usual..!
Let's have a look at some more graphs from the webinar;
They got the Global EV and BESS sales wrong IMO too. The growth rate at the moment for the first 4 month of 2025 is 29%. (China 35%, EU 25%, ROW: 37%). But they only got it as 19%. Wrong..!
Same thing for BESS forecast. The 25% is too low. It's happening nearly at 100% rate now.
Lithium carbonate production from spodumene is increasing in China.
Thanks to the Australians..!
Selling it cheap..!
Another interesting chart for us on the webinar is about
the production of LCE from spodumene. It's increasing a lot since April 2024 as you can see on the chart below. It's not only because the Chinese gets more spod from Africa and from its own spod resources, it's mainly because they use the spod they bought from Australia on production of lithium carbonate rather than lithium hydroxide. They used to use it for making lithium hydroxide before but the Australians sell it so cheap they prefer to make lithium carbonate by the Australian spod, because it's also very clean and easier to produce.
(20min delay)