Thanks, but calling BS or seeing trouble doesn't always translate into good investing or avoiding trouble. Uncertain results/funding/M&A/commodity cycle or markets in general are out to make fools of us all. I play good defence, a solid centre back who can prevent losing money, which is great but you can't live off nil-all draws. Ideally you want to play with a solid defence, creative midfield to generate the right attacking plays, and ruthless attack with a sense for goals.
Still some hope for HAS; some dumb politicians stump up a few hundred million more, or Twiggy swaps his $150M debt into a cheap script takeover (some floor of value preserved anyway), but low odds and average-to-poor outcome need to be priced accordingly. RE pricing the bottom line, even if HAS gets funded by the state shareholders in a profitless zombie are still toast.RE is at a fascinating and historical juncture imo. Either RE demand is insatiable even at high prices and the west builds out ex-China supply to match, or only truly critical RE supply is built out in the west and RE-PM substitution relegates RE to more bespoke consumption and modest pricing.
This is where I differ from nearly everyone else. I don;t trust Adamus price forecasts as far as I could throw them. Seen it for years with TZMI forecasting rising demand and prices that never happened (and when it finally did post-covid they didn;t pick it lol). Fact is, these commodity consultancies get their money by selling research and price predictions to miners/developers. Miners/developers are trying to raise their share price and ever more capital, they need a forecast that is as high as possible right... so they get what they pay for (within reason). Hardly a surprise Adamus came out with an uber-bullish forecast of the demand growth for RE's days after Tesla dropped their "no RE in our next motor" bomb,.. "Tesla is only a small part of the market, nothing to see here, pricing still to the moon."
Strategically the more I thought about it from tesla's perspective, supply security and pricing risk, the more sense it made. Exact same sense it makes for all ex-Chinese EV makers for the same reasons. LFP batteries replacing NMC batteries in EV's is a good analogy. Cobalt got ridiculously expensive in 2018 when "you can't do without cobalt in nickel cathodes, nickel batteries are the best, nickel to the moon". LFP isn't as high energy density as nickel cathodes, the west turned their collective noses up at them. Even after thrifting cobalt down to very low levels (but increasing Ni content), higher performance nickel batteries are still more expensive than LFP. Today LFP is 90% of the Chinese EV market and rapidly rising in the west to approx 30% so far. Turns out price certainty, supply risk are critical factors to EV manufacturers, and customers really don;t care about a small drop in performance so long as the price is right and the EV is reliable.
Post covid supply chain strangulation, Ukraine invasion, sabre rattling over Taiwan or the burgeoning US-China trade war I just can't see how EV makers simply can't take the supply/price risk with RE-PMs (magnets which don't even exist yet in the west outside Japan which is fully spoken for). A complete lack of off-take deals between EV makers and RE miners backs this argument when the same companies are fighting each other tooth and nail for lithium off-take deals. On the other hand, every day is another article about "when, not if" RE prices surge to incentivise new production the west cannot do without. Maybe they are all right, and if RE prices surge companies like HAS will be developed and make money.
So there you have it, all comes down to your RE price prognosis. Me on one side of the argument; Adamus, every stock spruiking publication newsite, broker, analyst, company, politician and RE project investor on the other... the set-up is just how I like it
GLTAH
(20min delay)