One more snip - this week on week returns table tells the story...

One more snip - this week on week returns table tells the story of just how bad things have gotten. The only positives I can find (scratching the barrel) are two fold:

- This is the final week for tax loss selling (to the extent that this has been a driving factor of the horrific June performances; and
- Spot prices (especially chemicals) are now back at levels reached back in January when they bounced. So there's at least one hypothetical scenario which suggests that spot prices maybe shouldn't go a lot further south. Then again, what happens if they do......

I think in a broader sense, what is happening is a normal part of a commodity cycle - supply fails to keep up with demand (!2020) and to compensate, prices go a lot higher which then incentivises a whole lot more supply to come online (2021-2023) - which in turn leads to excess or at least balanced supply. We are now at the back end of the supply finding its way online as a result of the 2021 price run up - LTR is due to start production imminently - Goulamina in Africa ditto (ex LLL), but after these two there is basically nothing material due to come online for quite a while. ATLX down the road from LRS and A11 (Ghana) are both ~2025 production starts, but relatively modest output expected.

There's really no major greenfields with the potential of coming online before ~2027 or 2028.

Andover (ex AZS) is now sold off - so not sure when it might be able to produce concentrate, but I assume it won't be before 2027. WC8 with Tabba Tabba won't be before 2027, CXO may never produce again unless SC6 prices are back above ~$2k/t, SYA is a strong chance of being forced into C&M in the second half of this year due to high cost of production, GL1 with Manna has been massacred so I assume the lack of funding means it won't be in production (if at all) until 2027/2028 now, DLI is similar (or even longer until production.

So perhaps we are getting a lot closer to a true bottom in the cycle, before supply potentially starts to struggle in 2025 and 2026.

However, the longer that high cost crud like SYA (and some others) keep fighting the inevitable, the longer it will take for this end of the cycle to roll over.