PLS (ASX) PLS chart

Originally posted by Darkstone: ↑

Probably worth providing an update to the charts for the US lead basket some of us are using to guide short term movements in PLS and other Oz Li stocks. These charts are the same set up as the last time I posted them, so we can see how my forecast went against reality. The blue arrows are our original projections

Predicted channels for today were:
Incl. Tesla 485 - 505 c:491 o:503
Ex Tesla 493 - 509 c:498 o:506

ALB

SQM

LTHM

LAC

TSLA

TSLA clearly has broken the other way, and it should fall further tonight as it went another 6% lower in aftermarket trade. They worrying thing about that is that it beat the consensus estimates for earnings and still got creamed. With the Spod spot pricing dropping again atm:

(Metal.com)

(asianmetal.com)

(Fastmarkets.com)

(fastmarkets.com)

It is also worth noting that there are a number of reports in both mainstream and alternate media streams suggesting China's recovery may not be going as successfully as originally reported. An academic reported the real youth unemployment (who are the larger share of factory workers) is really circa 49% and not the 19% reported. That post has since been removed and the academic is now "missing" (and the story is almost impossible to find now, even though it was published by Reuters)

:

So ... we may need an element of caution added to our optimism. I think China' economy bears close scrutiny atm - given how big a customer it represents for world Li demand, but on the bright side (and also not immediately clear from news services) the policy induced driver of falling Li prices from a few months ago should be over now as from July 1 this year the new emissions standards cut in in China meaning the car manufacturers / retailers can no longer dump the old ICE vehicles that don't comply with the standards (most of them) on the market at rock bottom prices (which helped crush the new EV sales for the last 12 months) so that significant market distortion that started this whole mess has now run its course. How that plays out is uncertain in this newly emerging Chinese economic crisis, but given there is always a demand for vehicles regardless of the economy and EV's represent the preferred option from the CCP, we might see some resilience in the China Li market even if the larger Cn economy is otherwise tanking. Just have to watch this space I guess.

Anyway, we at least seem on track for the 464 target I think. I am surprised the drop today was so delayed as we expected it a few days ago.

Expand

Great post Darkstone!

If I read/remember correctly, the last A40 shipment was on the 12th of July. I wonder if that is included in the pricing formula used by Fastmarkets (if price is average weighted, a corrupt sell of US$1500 could distort price signals). With that price artificially low by design, now that the holders have been given the boot by FIRB, I assume the A40 product will come off the market until a new owner is found (and no further selling price manipulation will occur), a spod price turnaround in the not too distant future. Not to forget some blockage/delay in some DSO coming out of Africa, things should tighten up.

Regarding the articles about the economy, there is nothing to suggest at this stage that such an impact is being had on EV sales. EV sales data seems very strong.

If there is any concern, it is from the traditional OEM's. It appears people are not buying their EV's, and they are needing to slow down production (especially the VW group of companies). The supply chain supporting them, may be putting a break on future orders. The hope is that Tesla and Chinese EV demand, outdoes what those OEM's would have sold and produced anyway.

This is probably just the dip needed, before the next run higher. Longs need to look out for opportunities that may present itself.

Big PLS news around the corner. They will not be releasing info early in the week if it is a bad news event. Whatever they announce, it will be positive news!