PLL piedmont lithium inc.

PLL General Discussion, page-2740

  1. 3,857 Posts.
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    There are significant costs in going into C&M and then coming back out of C&M. If you make a decision early in the down cycle to go into C&M then it makes sense because the avoidance of operating losses is larger than the expenses of going into C&M, the ongoing losses of no revenue, some residual operating costs and payments for C&M of the plant.

    Late-stage C&M because you run out of cash are brutal on shareholders. They have worn the operating losses and then get the C&M establishment losses.

    For better or worse SYA made the decision to improve available cash and operate through the cycle. This will provide additional confidence in current and future offtake partners around the reliability of their product supply. While American corporate banks are good at publicising the massive surplus that exists, not all the evidence aligns to that view. Surplus's may be much smaller than they indicate in their models. Its only recently that we have seen some down periods with the Chinese futures were the next one or two months are lower than the spot price. If there were really the size surplus some have suggested and an ongoing increase in those suplus's the entire futures curve should be downwards sloping.

    Mysteel put out this update yesterday. Those 2025 Supply-Demand Balances are tiny. The full-year position is only about 30 kt LCE. If demand was estimated at 15% growth and became 18% growth, that would swing a surplus this size between surplus and deficit (Its >1,000ktpa LCE and a 3% swing on that is >30kt). Now perhaps Mysteel is wrong and the Wall Street banks are right, but I'd be thinking its the other way around.

    Its distinctly possible that Global events are having the buyers be cautious and lower inventory levels and current weak prices are from this, rather than massive and continuing to build surplus. Other Mysteel reporting doesn't show the mega multi-hundred kt inventories that their models suggest exist and for at least one major bank, their historical data is consistent with having either "forgot" or not known that there are further recovery losses in converting the theoretical LCE content of spodumene exports into actual LCE. Their historical global supply totals align to the mine gate totals from USGS but the USGS supply totals being mine gate output of LCE don't factor in the supply loss that comes from refining from Spodumene to Lithium Carbonate or Lithium Hydroxide. This however doesn't prevent them supporting short positions and releasing the information showing the market is in a massive surplus and due to the size of that surplus it will take years to recover.
    https://hotcopper.com.au/data/attachments/7076/7076719-fe6ae08f13da1954899b4aae3fbba585.jpg

 
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Last
11.3¢
Change
0.003(2.27%)
Mkt cap ! $58.65M
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11.0¢ 11.5¢ 11.0¢ $13.79K 124.7K

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11.5¢ 171264 8
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