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Why are lithium prices collapsing?

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Re: Why are lithium prices collapsing?

#71

Post by hutzlibu »

CogitoCogito wrote: post #63
newswasboring wrote: post #61

Earlier quoted context omitted.

I see you didnt reciprocate the courtesy of not making an argument from personal incredulity. These things are complex af. When the people who optimize supply chains all day every day tell me that speculation market is more of an hindrance than help, I'm not going to take your random argument to be worth anything.

All your arguments are anecdote and opinion.

To me it seems, you both are rather debating semantics.

Of course it is "speculating" trying to estimate fuel prices, but this is not meant, when people condemn "gambling" on the stock market. What they mean is people with lots money investing wherever short term profits are possible and often gaming the market while doing so. So creating unexpected price changes for the actual industries needing those supplies and they obviously don't like that. But I couldn't draw a clear line between "necessary gambling" and "unnecessary gambling".

Re: Why are lithium prices collapsing?

#72

Post by CogitoCogito »

newswasboring wrote: post #70
CogitoCogito wrote: post #63

Earlier quoted context omitted.

All your arguments are anecdote and opinion.

What do you expect, you are one making a positive claim. That the speculation market is helpful.

I see. Your claim that it it is entirely negative is fine to make without any support whereas my claim that there are some situations that could be positive (only one suffices) is not okay even when support has been given (any mine that is opened or distribution center that is opened employs speculation).

You are just making a bunch of claims with no support but “people I trust say so so the claims are true”. Now I really will bow out.

Re: Why are lithium prices collapsing?

#74

Post by tuatoru »

jpgvm wrote: post #60
lmpdev wrote: post #47

Does anyone have any insight into when we're going to see some movements in lithium battery prices per cell? I've seen them stuck at $1-3/cell for what feels like two years

Probably not until significantly more capacity is added. Right now all the big battery suppliers (CATL, CALB, EVE, LG Chem, Panasonic) are all at capacity meaning they have no incentive to lower prices. If new capacity comes online and it's not greeted by increased demand (unlikely) then prices could fall. Wouldn't hold my breath though, the targets China has for EVs is going to provide strong support for demand even…

In 2022-23 several hundred billion USD of investment in new battery production capacity in the USA and Europe was announced in multiple announcements. (Source: cleantechnica, or batteriesnews, or energy-storage.news, or maybe industry weekly; I'll try to find it again. In the mean time, there's this[1]. Edit: and this: battery-news.de[2].)

Much of that should come online in 2025 - 28, if not canceled first.

Edit 2: there are several steps in the production chain beyond mining and initial refining. There is material production for anodes, cathodes, electrolytes, separators, and lithium; there is cell assembly, there is pack assembly, and there is production of electronics associated with cells and packs (charge controllers, pack management). Each of these has its own issues. It's not as "simple" as refining oil.

1. Chart 1: Lithium-Ion Battery Capacity Expected to Surge, FRB Dallas: https://www.dallasfed.org/research/economics/2022/1011

2. https://battery-news.de/index.php/2022/01/21/battery-project...

Re: Why are lithium prices collapsing?

#75

Post by smitty1e »

yunohn wrote: post #39
avianlyric wrote: post #38

Earlier quoted context omitted.

Not sure what they have to do with morality either.

I’m not a huge fan of taxes, but they are absolutely about morality. Society as a whole deciding to discourage consumption of harmful/unhealthy things like sugar, soda, cigarettes, alcohol, etc.

A moral argument can be offered, sure.

However, there is copious cause/effect data showing that non-sobriety is expensive in terms of health- and societal repercussions.

Re: Why are lithium prices collapsing?

#76

Post by quags »

Has there been a commodity that has spiked in price due to true lack of supply and non new supplies were found? From peak oil, to copper , lithium and rare earth minerals predictions of we will run out during a price shock always seem to turn into a price collapse.

Re: Why are lithium prices collapsing?

#77

Post by nindalf »

newswasboring wrote: post #52
RandomLensman wrote: post #50

Earlier quoted context omitted.

How do you measure the amount of unnecessary vs necessary gambling?

Necessary gambling is what helps the market figure out the real long term availability of something. I have not seen any necessary gambling in my years in manufacturing. So in my view all speculation on commodities seem unnecessary.

> I have not seen any necessary gambling in my years in manufacturing.

You need to manufacture a widget and it must cost no more than $5. You have a few inputs to your widget, some made with steel and some with plastic. If steel and plastic prices increase, your inputs cost more than $5 and you’re making a loss on every widget you sell.

So you go to the futures market and take a bet that the input prices will increase. If you’re right, you win $, which makes your widget manufacturing profitable and you’re still in business. If prices fall you lose the bet, your profits are lower. But hey, at least you’re still in business.

A responsible, well run manufacturing business benefits from the existence of such a market because it allows them to de-risk.

Re: Why are lithium prices collapsing?

#78

Post by odood »

tuatoru wrote: post #62

Lithium Triangle[1]. "a region of the Andes that is rich in lithium reserves, encompassed by the borders of Argentina, Bolivia, and Chile.[1] The lithium in the triangle is concentrated in various salt pans that exist along the Atacama Desert and neighboring arid areas, the largest areas including Salar de Uyuni in Bolivia, Salar de Atacama in Chile, and Salar del Hombre Muerto in Argentina. The area is thought to ho…

And Chile government is making moves towards being more involved in new deals. Not quite nationalization, but...

Re: Why are lithium prices collapsing?

#80

Post by Rufbdbskrufb473 »

bboygravity wrote: post #46
xbmcuser wrote: post #2

The more I read about prices of different commodities the more I realise the biggest movement in prices is not because of demand and supply but rather because of speculation and gambling. And how most of the news is manipulated. For example they are equating lithium price fall with stagnating car sales. Where as car sales might be stagnating but electric car sales are taking a larger portion of total car sales ie ele…

It's interesting to see that people still believe there is some type of fair price discovery when things like dark pools, market maker exemptions, naked shorting, tokenized securities, trillions in derrivative bets (hello 2008), spoofing (JP Morgan getting fined 1 billion after making 10 billion in profit in gold price spoofing) and so on and so forth exist. Speculation and gambling about what future prices will be a…

You just listed a bunch scary sounding financial buzz words, but I doubt that a thorough analysis of them would support your conclusion.

In fact, many have the opposite effect and result in more efficient price discovery. Take naked shorting for example. Without shorting, it would be far more difficult for an equity research firm to be incentivized to look into fraudulent stocks, as was widespread with Chinese companies a few years ago. Without their efforts, stock prices would have remained inflated for longer.

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