It's all very well to say that the current SP is irrational because the SC price is $? (Is it or should it be what the manipulated price that Chinese reporting agencies are quoting?).
Back in early 2022, the SC price was heading north rapidly and the PLS SP was heading south rapidly, to a low of $2 ish in mid June 2022. On the 23 June 2022, PLS accepted a pre-auction price of USA $6350 for a 5kt shipment of SC5.5.
Was that an irrationally low SP for PLS when the SC price was obviously heading up, as it had been for a considerable period of time. That didn't stop the market makers from hammering the SP down in the face of a Lithium supply shortage. Now how close were GS and the other FIBO cohorts in forecasting the SC price. They were way off and now all the GS & FIBO fan club are trying to say GS & Co were the only ones who forecast correctly. What a joke. They were wrong completely. The old proverb "A stopped clock is right twice a day" comes to mind.
So, to say the SC price is this so the SP should be that, isn't an indicator of rational or an irrational market, IMO. We are waiting for this sector to mature, more diversification in Lithium Chem production ex China and more reliable price reporting agencies to discover where the real LT cost curve is, to provide a sustainable supply of Lithium for the transition from FF to the Electrification of everything.
I suspect we are still a way from this so in the meantime, we'll have to suffer the extreme volatility that being in this sector subjects investors to. I also suspect that the forecasts that Lithium prices will stabilise at this new low range ($1000 - $1300) may be wishful thinking.
We shall see.
PLS Price at posting:
$3.83 Sentiment: None Disclosure: Held
(20min delay)
