Lithium is not in favour with sharemarket investors but the big money money/ industry investors remain bullish.
"and on the assumption that lithium prices are now bottoming ahead of a steady rebuild as the widely forecast supply deficit around 2028 takes shape.The supply deficit is more certain than it was because the crash in lithium prices is already knocking out higher cost production. The slump in prices also means new projects will have to be top echelon to attract financing and offtake agreements.
So until there is confirmation lithium prices have turned, Garimpeiro will be steering clear of lithium explorers without a resource under their belt. Many won’t be able to ride out the current downturn and will have to reinvent themselves as uranium or gold explorers.
It could be a different story with the lithium developers, particularly those with established large-scale resources. The 30%-plus growth in electric vehicles last year to 14% of the market suggests the current lithium over-supply will indeed being a passing thing.
New large-scale and long-life lithium projects will be needed. They are the ones that will attract financial and offtake support from the lithium chemical makers and the global auto industry while small projects will fall by the wayside.On the back of their Tier 1 discoveries in Western Australia, beaten up Liontown still has a $3.3 billion market cap while Azure’s more recent and 60% owned Andover discovery has an imputed 100% value of $2.86 billion, even if it is yet to post a maiden resource.
Given both had sub $100m market caps before their respective discoveries, the reward for Tier 1 discoveries remains massive. And notably, Gina Rinehart is now calling the shots at both of them.
Australia’s richest person clearly does not have any fears about lithium prices remaining in the dumps. Because Azure is the subject of bid from a Rinehart-SQM combo and Rinehart’s share sits at just under 20% at Liontown, Garimpeiro reckons both sit outside the bargain basement category.
https://unauthorised investment advice/experts/barry-fitzgerald-as-lithium-prices-plummet-this-us-play-looks-better-value-by-the-day/
