LRS General Discussion, page-19200

I sold out of the remainder of my holdings today. I didn’t expect the last 2 weeks of destruction on PLS, but when it happened it forced a rethink on my behalf as to what I think the lithium sector may do for at least the rest of this year.

I’ve been bullish on LRS for a long time, and part of this was because I had assumed that producers and developers would make rationale decisions regarding their production decisions (which has clearly not happened). Putting it simply - pretty much every single higher cost producer has done the opposite of what a logical person would have assumed they’d do. MIN is loss making on all three mines, SYA makes enormous losses on NAL, LTR is guaranteed to be losing s making on Kathleen Valley - yet they’ve all continued on as if spot prices are at $1.5k/t. Spot prices would not have fallen this low if a few of these had gone into C&M. It’s also not particularly helpful that PLS is desperately expanding production at the same time as there is already a supply glut.

I do believe spot prices will turn around but I’ve lost any confidence on this taking place anytime soon and I’m too worried about what will happen in the interim to valuations. I’m also aware that LTR hasn’t even made its first shipment yet, but they are expecting to be producing up to 80,000t per quarter at some point over the next year. What happens to spot prices when they start ramping up a whole lot more?

While selling is right for me in my position, it might not be for everyone - others might be perfectly happy to sit back and wait for the inevitable lithium company / mine collapses to happen.

i still think PLS has the strongest balance sheet to weather the storm.