PAM (ASX) Thailand accelerates lithium exploration to become EV production hub

Originally posted by doncamilo: ↑

The lithium prices in China is a scam. And they all know it.

They started theGuangzhou Futures Exchange (GFXE)in July 2023 in China. This futures exchange is a scam.

In a futures market the commodity is sold by contract by defined dates. And the buyer may ask the physical delivery of the commodity at the end of contract date instead of selling the contract.

The future exchange company is responsible to keep the inventory in its warehouses and responsible for the specs of the product. Seller has no responsibility over the product specs sold. So GFXE has the responsibility of the lithium carbonate specs (which is understood now that the lithium carbonate in GFXE's warehouses are crap and needs further refining to be in the stated specs e.g. 99.5 carbonate).

In July 2023 the lithium carbonate price was around 350k RMB in the GFXE. Then they pushed the price down to 85k RMB on Dec.11. When some buyers asked for physical delivery of the lithium carbonate the product sent to the buyer was very low quality. Buyers rejected those deliveries and sent them back.

Then the lithium carb prices in GFXE went up dramatically (10% in one day which is the ceiling limit) on Dec. 14. Then the GFXE tried to cool down the market in recent 3 trading days.

The GFXE didn't keep any inventory until Dec. 6. They started getting some inventory in their warehouses on Dec.6 and later. They got 40t on Dec.6 and they increased it to 1010t on Dec. 11

The January 2024 expiry contracts are very important. They might kill this GFXE institution completely. Therefore the traders in GFXE are now switching their contract to July 24 by paying the cost.

However it is now understood that this future exchange is a scam.

The Chinese closed the lithium deficit of approx. 280kt deficit of 2023 (increase from 2022) by producing lithium carbonate from their own lepidolite resources. However the cost of producing lith carb from lepidolite is very expensive; around 100k RMB. Today the lith cabr price in GFXE market is 103k RMB. There is no profit running the lepidolite mines in China anymore.

Probably the Australian producers will reduce their sales volumes in 2024. Tianqi/IGO JV has already made the decision that they will reduce their sales 25% in Q1-2024. Tianqi/IGO JV even will reduce the production in Q2-2024 of their sales reduction won't work in Q1.2024.

So I'm waiting a dramatic turnaround in lithium prices in H1-2024.

UBS, Goldman Sachs, JP Morgan are all misleading the market. They say the supply is over the demand. UBS say the lith demand will increase 20% in 2024 and supply will increase 40%. Total BS. They said the same thing for 2023.

I said on my post#:68249837on June 13 2023 that EV sales would be around 45%. They all said the EV sales number will be around 14m EVs. I said it will catch 15m mark. (it was 10.5m EVs in 2022).

The EV sales growth rate is the key to lithium demand. When the EV sales are increasing 45% then the battery production is increasing 45%, and the lithium demand is increasing 45%.

Then we got the news for battery production was increased 44% from 380GW in 2022 to 550GW in 2023 (Jan-Nov period).

So the BEOT is fooling us, misleading us, by all their crap reports. The lithium demand increased from 750kt in 2022 to over 1mt in 2023. That's the result of 44% increase in battery production and EV sales.

The downtrend in lithium price is a fact but it happened because of Chinese lepidolite production and very little imports (as hard rock, not even spod concentrate) from African resources. The Chines lithium carb. production from lepidolite resources has been around 150t. Their imports from Africa is no more than 50kt of LCE. That makes around 200kt LCE. The deficit of 70kt-80kt was closed by DESTOCKING.

The Chinese have no where to go for keeping the lithium price this low anymore. This is the bottom. A very little sales reduction (like Tianqi/IGO will do in next quarter) will kill those manipulators.

Anyway, we will see what is going to happen. It's even being hard for me to explain so much details here anymore.

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