SQM was not able to increase production in 2018, OREs numbers are also poor. I havent summed up new supply from hard rock new comers but they still ramping up. That lets me think a big portion of Li from China helped to ramp up EV production about 50%. This is the big unknown in supply or does anybody have a clue about tons of LCE the chinese are able to produce by themselves?
China is pretending that they could also rely on their own Li and dump prices. That could be true for the very moment since a lot battery makers are not producing high end battery yet. So they can use their low quality LCE.
Battery makers are about to switch to NMC with low Co content which need hydroxid. Their low quality LCE will be useless then. BYD batterys for example are LiFePO4 but want to change to NMC. Alone this company will create a big demand in hydroxid by just changing chemistry. This will drive demand much faster than ordinary ramp up in cell production capacity. Would be some mods on the line instead of building a new plant.
My guess is this transition was slightly delayed to give the battery companys a good position to negotiate price for 2019. This wont be the case next year.
IMO
GXY Price at posting:
$2.09 Sentiment: Hold Disclosure: Not Held
