vmp
FYI - PLS have advised to market they will be fetching between $2,600 to $3,000 for "contract volumes" for the March quarter, and spot prices are fetching $3,600pt, but due to current deficit, Platts advised some offer were heard at $4,500. The is approximately 10 converters in China that have not secured contracted supply, therefore, those companies rely on the spot market to feed their plants, thus paying said spot prices.
Also FYI, due to said supply deficits, contract pricing mechanisms for some producers, including PLS, have been re-negotiated to align more closely to the spot market, including alignment to Chem prices, for which the latter has always been the case. So please try to keep up, maybe step out of your bubble for a while, and do some research, as I would of though it's important to understand your competition and how they might impact this company's place in the supply chain. Basing your assumptions on false information (lack of research) to support your narrative is unhealthy for all involved.
As you mention, LTR has a lot of uncontracted tonnes available, however some research would inform you that PLS's Ngungaju Plant (former Altura operations) also has uncontracted capacity of ~200kt of spod, which will be sold on the spot market via its BMX auction platform, capitalizing on the above spot prices over the next few years. Good time to be a producers, hey....
PLS Ngungaju Plant commissioning and ramp up and Pilgan Plant improvements have been in motion for a few months, while there is a few projects coming online later this year, they are MIN Wodgina, CXO, Sigma Lithium and LAC's Argentina's brine project. While the market will see new supply from PLS in 2022, the other abovementioned projects will be in commissioning and ramp up phase this year, thus most of their supply will be felt in 2023, noting Wodgina has 3 250kt spod concentrate trains, thus has 750kt of capacity. Furthermore, PLS's Pilgan plant was designed to accommodate expansion, without significantly interrupting current operations, and as such PLS plan to incrementally expand to 1 millions tonnes of spod over the next few years, assuming market demand conditions support such expansion. At present, they have capacity of 580kt, and have announced they will make a FID on 100kt incremental expansion of the Pilgan plant in the near future, increasing overall capacity to 680kt by mid 2023.
Then a year later, you have LTR coming online, all going well through commissioning and ramp up phase to nameplate, will bring a further 500kt to market in 2024, which is a large scale project, thus economies of scale. However, lithium isn't easy, and history tells us that there are always delays, thus I'd expect LTR's ramp to nameplate to take most of 2024 CY, thus first year production might reach 300kt.
While demand will remain strong through this decade, according to BMI, market will be in deficit until 2025, then move to small temporary surplus in 2026 & 27, then back to substantial deficit for rest of decade, and beyond.
Note the above BMI forecast counts all the known and probable supply that will come online this decade (including LTR). But as the above- mentioned supply comes online this year, 2023 and 2024, the tightness in the market will start to ease, thus crazy high lithium prices will fall from said lofty highs and move to a new normal. In LCE terms, a few years back, consensus was lithium chem prices at $12,000 to $14,000 pt would be sufficient to incentivise new supply, however, due to the forecast substantial deficits later in the decade, the new incentive prices will need to be $18,000 to $20,000pt, the new normal.
Long story short, the froth on the crazy high lithium prices will be blown off as new supply comes to market, but as above, will remain higher than previous cycle due to forward supply/demand profile. IMO, an important development to follow, is that most spod projects are locking up a fair chunk, if not all of their spod production for their associated down/midstream chem production, so on that note, cost of spod production is probably more relevant than spod sale prices. I guess those spod only projects will be competing with China, as they take ownership and exploit African projects, which probably means the smaller, thus less economic projects outside Africa will struggle to compete.