T O P
symmiR

Can anyone come over and read this to me?


Mitchuation

Pretty sure we should patreon this cunt for the quality content he provides. A shame ASIC would be on him like myself on a case of super dry. u/JSwyft Good read mate, Cheers!


bah_nah_nah

All in PLS


Hypertrollz

Thanks for the informative post JSwift. While I feel that this is a great writeup it unfortunately fails to capture some other causes of the attack on lithium. I have it from very reliable sources with inside knowledge of these things that the Lizard people who control the Illuminati have declared a cold war on the alien race that Elon belongs to. In an attempt to bring his downfall they are trying to white-ant the lithium industry so Tesla struggles and eventually fails. Rumour is that Elon is planning to go to Mars to steal the Lizard peoples stash of intergalactic porn. Who are my reliable sources you may ask, they are my Nana's strip-crotchet club. DYOR GALLAH SOUVLAKI, Not financial advice.


JSwyft

Hahaha your theory will be integrated into draft 2. ​ u/heizenverg Somebody else might be able to give a two sentence summary, but its defeated me.


Hypertrollz

👍


SunkDestroyer

All hail the lizard people!


Z3R0369

I see red I see red I see red! Hahaha 🛑 nahhhh go 🍀🍀🍀


heizenverg

So what are you saying man?


[deleted]

I just printed this out to read with my Sunday papers and a cup of tea. Thanks.


BuiltDifferant

Can I have a crayon version thanks x


shitredditsays01

Where is the 🚀 rating my man? How am I supposed to understand a wall of text without emoji's? Who do you think i am, a financial analyst?


JSwyft

Been trying to add it to my repertoire, but just haven't found the time to master the rock emoji yet. ​ Thanks u/MAPABI u/Ashley_Sophia & u/Mitchuation, but with heizenverg's "what the deuce are you on about" being one of the top comments, it seems my posts are still a mixed bag.


ocean_sky_wind

We love you JSwyft! TLDR We are 🐂 for another year. 🚀 (Except for the recession.)


JSwyft

Hope it goes well! I humbly suggest there's also nothing wrong with sitting things out for a bit any time you're unsure about the market direction 👍


kervio

Nah this is the good stuff, keep it up!!! Thanks for your service 🙏


puds1969

Cool, but like, what is the rockets 🚀 ? -5/5? 3/5 5/5?


JaseLZS

YESSSSS HE’S BACK! OUR SAVIOUR!


BuiltDifferant

Ohhhh shit the mesiah back


[deleted]

Great write up Swifty


Creative_Gain5902

So based on what I can comprehend, which isn’t much. You’re saying lithium stocks 🚀till - 2023 then 🛬 decrease after 2023 Q2 if demand remains the same?


JSwyft

The supply response in 2024 should be relatively weaker than 2023. Wodgina can produce 750ktpa (\~100ktpa LCE), and was mothballed during the surge. It's the final big stick that suppliers had. In absolute terms, 2024 will see LTR (\~30kt LCE) , Goulamina (\~25kt LCE), PLS (\~19kt) & AKE (\~19kt LCE) provide decent supply, but it still looks a bit underdone globally. I'm leaning towards a recession as the biggest threat.


DrizzyDradle

> I’m leaning towards a recession as the biggest threat. It’s possible the US is already in a recession right now. Last qtr they posted negative GDP


R4ND0MEYES

Great post as always mate! Looks like your demand from other non-EV sources is a bit lower than the figure GS & Credit Suisse are using (approx. 5.5% vs 10-13% in 2023). I know it's only a small variance but is there a reason? I figure every little bit helps keep LCE undersupplied & prices high!


JSwyft

Thanks for reminding me to add that to the notes. The 2022 figures are built in, so for *additional* non-EV 2023 demand, GS have: * 11,000 tonnes for energy storage systems (26k → 37k) * 1,000 tonnes for portable electronics (35k → 36k) * **Total 12,000** Fastmarkets have: * 7,000 for consumer batteries (70k → 78k) * 5,000 for energy storage systems (17k → 22k) * 600 for failure rates. * **Total 12,600** As those are absolute totals, I simply took the 12,000 and spread it over 12 months (1,000 per month).


Affectionate-Gap-166

Do you factor in an increase in these systems at all? Several friends in different energy sectors (one owns his own renewable energy company, another specialising in solar installations and electrical storage) anticipating a huge uptake with the energy price spike this year. The tech for home bat storage has a lot of wiggle room for improvement so already existing solar properties expected to increase uptake for bat storage as well. Coupled with a big push for renewable energy farms both Australia wide and world wide(Acciona wind farm in QLD about to start construction for example) will likely need more bat storage for high production times. Maybe this could balance out the anticipated drop in demand for EVs. Or maybe I'm just speculating. Time will tell I guess. A shit ton of variables to consider but there is one firm constant - ASX autists wanting to bag on speccy mining stonks.


JSwyft

Discussed it a bit [here](https://www.reddit.com/r/ASX_Bets/comments/v58psy/comment/ib8yod5/?utm_source=share&utm_medium=web2x&context=3) with Esquatcho\_Mundo. Definitely something that looks to be conservatively modelled over the next 4-5 years, but has solid lithium alternatives available & more incoming.


R4ND0MEYES

Makes perfect sense when you take the nominal additional values, thanks Swifty!


JaseLZS

Hi JSwyft, got a noobie question hoping you could answer. How does one go about forecasting Supply & Demand? Do you just Google “List of Lithium mines in the world” then organise them into “In Production”, “Soon to be In Production”, Production in Future”. Is there a good way to go about finding every possible lithium mines by using the internet? One way I can think of is, going through every Public listed company and find the ones that produce Lithium. But what about private companies that produce Lithium?


JSwyft

Most of them I just pulled from memory, then just looked at a map to remind myself of the missing ones. Almost every Western mine that can produce lithium is on the list: Bikita (Zimbabwe) is one of the exceptions. Their production is static so far, though. I left off Chinese spodumene projects (no expansions), lumped Chinese lepidolite & brines together (I believe there are a few companies involved, but it's hard to get that detail). Lithium will still be pretty exclusive in 2024, but new producers off the top of my head: * Kathleen Valley (LTR) * Goulamina (LLL/Ganfeng) * Arcadia (ex-PSC, now Zhejiang Huayou) * new Chinese projects * maybe Ewoyaa (PLL/Atlantic) * Manono had been a potential Q4 '24 start, but the delays will probably extinguish that chance That's pretty much it.


Ashley_Sophia

Thanks so much for these. I always save them to my bookmarks app thing. Will def give it a good read over dinner tonight.


michaely2k39

you just earned a follower. thanks for the post mate, very insightful


Andrew_Higginbottom

Wow! A lot of work. Thank you. ..I like a man who can see his flaws :) A really rare trait these days.


BackgroundField1738

Mining low grade lithium lol to plug supply gap. Look at EUR barely even got funding to go ahead. Classic investment bankers who don’t know real world pummelling some random report with graphs (I used to work at investment banks so know this stuff)


raindog_

Great write up. Question: How do you factor rising energy costs on uptake of EVs…In a negative way? At what point does charging your car cost more than petrol if energy prices keep going up and staying up? I guess energy costs may fall again by the time EVs are more wise spread, but history tells us they rise and stay risen. Do renewable energy as sources for EV charging need to be factored for more mass uptake?


JSwyft

It's a good question with respect to the overall grid load. On an individual level, one of the recent things I discovered about EVs is that there's free charging at supermarkets, universities, shopping centres & other places. So for a driver without solar power, you pay nothing *if you're an organized person*. But collectively, it could easily turn into an overall issue that I don't have the answer to. Vehicle to grid with solar is probably the ultimate goal.


Triog0n

You never fail to deliver outstanding work mate. I am in awe in how you have the time to do all this, but I think this level of detail goes beyond the financial into an intellectual interest in the lithium market. I agree simply that the broader health of the economies of China, America, the EU and Japan are likely the most important of all factors listed above. Their collective GDPs and commitments and abillity to purcahse EVs make them the single most important factor in future demand. Should their economies enter recession or get moved into a war time economy I can see pretty much ever guess of demand end up wrong haha, as you said. Will also say as we have spoken about battery chemical compositions before all the supply demand talk has me thinking about the other side of the coin. Metals like platinum and palladium have an estimated 40% and 75%+ demand coming from catalytic converters and such. I wonder if there are such reports as GS or people like yourself who have revirewed the mine life of PGE operations annd what a 2030 PGE market might look like with ICE cars experiencing greatly reduced demand. Food for thought indeed and far too large a timeframe for a short to be effective IMO. But I wonder how a company like CHN will navigate it. They are a $2bil MC Australian aspiring PGE producer and that market cap makes some lithium producers look well valued haha.


JSwyft

Thanks & you're right—there's a buzz to lithium that I enjoy. In 2015, the entire battery grade LCE industry was probably worth US$750mill. 7 years later, and we're probably talking US$20bill, and growing 30% YoY this decade. Just seeing all these big investment banks suddenly devoting resources to analyzing the sector is a confirmation of its changing status. The state of lithium stock analysis has improved exponentially in the last 12 months, too. Benchmark, Fastmarkets, Platts all provided great industry info previously, but if you wanted traditional stock analysis, Rodney Hooper was decent, but not too much else. Courtesy of generous member, I've read detailed reports recently from MQ, UBS, Barrenjoeys, JPM, CSuisse & GSachs. The overall errors are becoming way less glaring. Interactions between new energy, PGE & other raw materials is a pretty interesting question. I don't know enough about them, but I do think there are ramifications that probably haven't been thoroughly discussed. There's also the manganese situation that we talked about before. I'm still seeing sodium as a cat among the pigeons. I think that MIN's error in not making Wodgina train 1 available has ultimately hampered lithium. I have huge respect for Benchmark Minerals, but I can't accept their 2029 forecast of a huge undersupply. We've spoken about sodium being 30 years behind lithium, but I wonder if that's the right way to frame it. Seeing as lithium has already forged processes that are arguably tailorable to other metals, maybe we could say that sodium is $Xbillion of investment behind lithium. And maybe 30 years can become 5 years if companies are willing to throw money in that direction. And at these prices, surely they will. I'm only thinking of sodium as a supplementary technology, but it could possibly normalize prices later in the decade.


Triog0n

I agree. I think once you have the car with a battert, the charging stations, factories and customers adjusting chemical will be the no.1 investment. The first company to make a a super low cost battery EV can undercut everyone. Same as the first company to make a super long range, or super fast recharge can also enable huge market share swings. I think we will see this become the major driving investment until companies settle on battery compositions that prove well rounded for each price point and they reduce R&D. So sodium batteries, could 100% be only a few years away but I think companies just want to get the ground work in first and once thats done it'll be all push to differentiate and thats where I also see Tesla getting shredded. Tesla have the ground work advantage. They have the brand, the factories and the charging stations so they have been well suit to grow but once everyone else has caught up I can see them and many others getting squeezed. Also I expect nothing less from MIN and making errors haha.


drchris498

What a great write up. Appreciate the info and your time!!


vroomvromm

Is this satire? Because ‘coz it starts too fast, the whole thing is large and stupid’ is a whole new level of absurd argument against EVs.


1sw331

great write up. There are some parts which I need a ELI5


heizenverg

In two sentences


raegrog

TLDR buy PLS ???


seab1010

Last years trade… I like the long term outlook but it is a terribly overcrowded trade and I think path of least resistance is currently down… several global instos also turning sharply against them now. It’s human nature to look at one years supply deficit and model it years in the future. Rarely turns out this way…. I doubt the lithium price will be anywhere near as high in a year. Back to the instos….. Shortly after the GS report UBS global downgraded albemarle in the US with cuts to their lithium price deck - might flow through to the valuations on Aussie stocks once their Aussie desk runs the numbers. Credit suisse also whacked a take profits on the sector Thursday or Friday. Macquarie are sticking to their bullish outlook for the companies but have also been the largest selling broker for some months……… mid tier brokers are pretty well perpetually bullish but in my experience highly conflicted and rarely worth listening to. Making a LOT more money on coal stocks this year… Whitehaven especially - even after the several hundred percent rally and prospect of 15% plus gross yield at current share price it’s only on 3.5x earnings. Coal price could swing any time though…..


JSwyft

I agree that the big gains were made between November 2020 and January 2022. This post corrects errors from inexperienced analysts—it doesn't suggest multi-bags. You agreed with what I wrote about it being impossible to model years into the future. You agreed with my skepticism of Albemarle's valuation. Credit Suisse issued their take profit recommendation on Wednesday (June 1), which contributed to the sell-off. Your average retail investor thinks of stocks in 2 ways: * dividend * capital growth You mention coal stocks. Coal stocks are plagued by the perception of an industry that's dirty and dying. So an investment in coal is effectively an investment in dividends. Returning to PLS: a spodumene sale price of US$4,000/t gives PLS a net profit of AU$3000/t. Except that PLS is selling auction spod closer to US$6k/t, while formula is edging toward's US$4.5k/t. And prices are gently rising again. So in 17 weeks, PLS want to be producing 580,000 tpa. If prices were to come back down to US$4k/t, that's an underlying profit of $1.74bill, minus an impending $100mill CAPEX. 4.5x earnings. So both lithium and coal prices might be closer to the top of their range. You say that you like lithium long term, while coal is negatively perceived (capital gains). You have 3.5x earnings on WHC, ahead of PLS's forward looking 4.5x (which still assumes prices drop back down to an average of US$4k/t). Using your own metrics, I can't find a compelling reason to choose WHC over PLS.


seab1010

Not buying whc today… bought it and nhc 9 months ago…. Purely trading although my trades are often held well over a year. Pls I have nothing against… just I expect it will be able to be bought cheaper in the coming months. Nothing about fundamentals, but insto behavioural responses. I’ve done ok over the years positioning for sectors cum upgrade and lightening off those cum downgrade. Those holding through the cycle no biggie… but I’ve always traded resource cycles…..


JSwyft

Understood, and I think we're probably in agreement on a lot of things with respect to trading. Well done on the coal positions.


seab1010

Well done on your work but the way… really good for a lot of people here to learn about what they actually own…. I spend as much time ‘analysing’ the brokers as I do the company fundamentals. Keep up the good work.


-smoke-and-mirrors-

A lot of their off take is contracted and will not achieve prices near spot / auction values, is my understanding.


JSwyft

**2022:** 380ktpa at formula prices, which appear to be about 80% lower than market prices. 200ktpa is at auction. **2023:** 380ktpa should still be at formula, with 300ktpa at auction. **2024:** \~210ktpa at market rates, \~300ktpa at formula, \~400ktpa for midstream salts or auction, 90ktpa (12k LCE) lithium hydroxide **2025:** \~210ktpa at market rates, 90ktpa (12k LCE) lithium hydroxide, maybe \~200ktpa at formula, maybe \~500ktpa for midstream salts or auction


-smoke-and-mirrors-

Love your work


wotbois

TLDR please


muscular_feet

Battery go brrrrr


BIGBRAINBUYER

Where the OG LKEtards at


Hypertrollz

Our cold blooded overlords


SilverNitride8657

What happened to SYA??


JSwyft

The table treats all spodumene as lithium hydroxide/carbonate, and I've used a 2 month lag from the mine gate to hitting the market as lithium hydroxide or carbonate. I expect La Corne to commission & sell spodumene from April, which will be sent to China or Tesla USA premises, and converted to hydroxide by June.


Apprehensive-Ad-6053

To buy the lyfyum or to sell the lyfyum


OverUnderstanding965

So does this mean all in on SYA?


No-Doughnut9578

I think I speak for all when I say "Wen Lambo?"


[deleted]

[удалено]


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Markma1989

Honestly I have no faith in lithium and the entire ev market. EVs are not any better than traditional vehicles, it actually produces a lot of pollutants when they purify lithium. This whole Tesla, Elon musk thing will be vanished in history.


JSwyft

Then are you expecting an announcement soon from the Chinese, American, German & UK governments? All those countries have plans to ban ICE vehicles from 2035 or sooner. That may not be possible, but even having the target gives impetus to EVs, and those govts would need to act imminently to change the course of billions in investments over the next few years. The USA reversing its decision if DT is re-elected is possible. The others? I'm not seeing it. Due to lack of raw materials, they'd need to be more lenient on the target, but cancelling it altogether is something totally different. Expect BYD to overtake Tesla as the highest volume car seller in the next 24 months.


Markma1989

BYD sucks. Ev has some serious issues that need to be solved before it becomes the substitution of traditional cars. I always feel uncomfortable when I ride Tesla, coz it starts too fast, the whole thing is large and stupid.


fruitsalad1212

What are some examples of those issues which need solving? Saying EVs are bad because Tesla's accelerate too fast makes little sense as an argument. Tesla is a performance EV built to go fast, there's a whole range of different options for EV cars like there is with ICE vehicles.


BuiltDifferant

https://imgur.com/gallery/mA74QoA


[deleted]

Lithium is an infinite resource