I appreciate your perspective. I think our primary disagreement is about the price of lithium as a commodity moving forward.
Let's look at what can be seen right here, right now. Supply side is actually keeping up pace with demand (as can be seen with a drop in Chinese Li spot prices over the last two quarters), and 'all' key producers are all planning significant ramp ups in preemption of future demand forecasts. From the hard rock of greenbushes to the brine of SQM, and everyone in between. This does not serve the narrative of Li prices staying at record highs ad-infinum.
I think relying on other countries to provide EV subsidy provision is a deadly red herring. If EV tech truly expects disrupt the ICE paradigm and the global commerce therein, then battery costs need to ebb below $100 per kilowatt hour. That is the expected tipping point adoption price. Right now it's somewhere between $150 and $250.
That can only mean one thing - downward price pressure on lithium if you're only offering offtake agreements, and/or much more likely, asset buyouts (or major stakeholdings) by major players to usurp/control supply chain costs - upstream and downstream.
And that is essentially what we're seeing right now with the dance between Tianqi and SQM. Tianqi is also wanting to build a processor in Perth to reduce offtake shipping costs - also a potential suggestion of their future plans with nearby assets.
Personally, i'm buying the narrative of the Deutsche Bank report. A 180 page assessment that proclaims the next century to be the Li-Ion century, paints both best and worst case scenarios of the impending Li-Ion revolution.
The DB narrative suggests there's a four year window for hard rock producers to lock in profit before large scale brine producers flood the market with their upgrades/upramps and effectively kneecap the spot lithium price. They'll then battle with each other in a competitive situation of commodity oversupply and market control, and drown out/buy out weaker competitors in the sector.
The lithium game has tightened up considerably since the start of the year. Impossible to say who will emerge victorious from these games at this stage. But each day PLS appears idle in their actions, is another day they fall behind the competitive eight ball. And so it is for all players in the local sector - PLS, ORE, GXY, NMT, LIT, AJM, KDR, etc. Time is of the essence, and all delays are poison.
(20min delay)