I work in hard rock mining. Lithium is opaque market. It’s opening up. Contracts get fixed. Supply costs shoot up. Miners open more mines. Prices collapse. Bigger miners eat smaller miners. Rinse and repeat
This is the way.
Why are lithium prices collapsing?
81–90 of 524 posts
Re: Why are lithium prices collapsing?
#82Earlier quoted context omitted.
No it's not. Finance bros like to tell themselves that, so that they can justify their place in morality.
Bros treat it like a law of nature. "nah brah it's just rational actors rationally acting with rationality" Supply and demand is a thing the same way the convention of shaking hands upon meeting is a thing.
There are alternatives to shaking hands; no greeting, bowing, classes hands, high five, fist bump etc.
If supply and demand is just a convention, they what are the alternatives?
I guess I’m ignorant, but central planning is the only one I can think of.
Re: Why are lithium prices collapsing?
#83The 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…
Price increase is governed by how much a buyer is willing to pay and how long a seller is willing to hold. That is supply and demand. Their reason to supply or demand is 100% due to speculation or gambling or whatever you want to call it. There is no intrinsic value for anything. Supply and demand is not a magic spell that saves people from guessing what prices should be.
Re: Why are lithium prices collapsing?
#84Earlier quoted context omitted.
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 compan…
Isn’t that argument somewhat strange or dishonest? To paraphrase you: I‘d rather have naked shorting and the associated manipulation and problems with it than better price discovery for stockholders.
In your example, the stockholder isn’t protected either, only an equity firm derives profit from this information. In a more ideal world the stockholders themselves would do this due diligence, which is something that already happens.
Also there’s differences between shorting and naked shorting. I could well imagine allowing fully hedged shorting and outlawing naked shorting. Especially considering the issue of fail to deliver, that’s just absurd with our technology.
Re: Why are lithium prices collapsing?
#85Earlier quoted context omitted.
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.
What do you think morals are?
> Morality is the differentiation of intentions, decisions and actions between those that are distinguished as proper and those that are improper.
Re: Why are lithium prices collapsing?
#86Earlier quoted context omitted.
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…
What is the issue with a dark pool, for example? They are generally not designed for price discovery anyway.
But wouldn’t it be better if the volume at least is shown on open exchanges?
Re: Why are lithium prices collapsing?
#87Earlier quoted context omitted.
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 compan…
You referenced due diligence as naked shorting but they are different.
You listed a bunch of financial buzz words and didn't disprove OP.
Please show how naked shorting incentivized good due diligence.
You could have just pointed to the massive new supply that was announced, it's the logical reason why the price dropped.
Geopolitics are the primary mover of markets currently.
Re: Why are lithium prices collapsing?
#88Earlier quoted context omitted.
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 compan…
You don't understand what naked shorting is. Naked shorting is shorting without first borrowing from someone. Normal shorting is limited by the availability of stock to borrow (by the way, if stock holders wish, they can request from their broker that their stock won't be available for borrowing, potentially causing short squeeze), by the interest rates on borrowing the stock.
Naked shorting skips it all. Some market makers are privileged and can sell stock they don't own and didn't borrow. So they have a privilege of printing stocks in the short term, and that's quite broken, and many of them abused this position to manipulate markets. Normal participants in the market can't naked short.
Naked shorting means that the market maker who supposedly sold you a stock, can now fail to find the stock he sold you, leading to "fail to deliver".
The excuse given is that naked shorting allows for more liquidity, but given the other problems, I think it's bad.
Re: Why are lithium prices collapsing?
#89Earlier quoted context omitted.
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 increas…
I’d assume that hedging buy prices or long term buy contracts are not the same as gambling.
Re: Why are lithium prices collapsing?
#90Wasn't some country planing to nationalize their lithium stock?
Chile https://www.ft.com/content/ebd48bbc-1390-4679-99fe-682975bbd...
Here's some wild speculation grounded on a wisp of research:
Eurasia based cartel had cornered the market on lithium vital for new energy. US based interests bent the ear of the Chilean government to break this monopoly by nationalizing these privately owned mines and rediverting the supply. Speculators got wrecked. Does anyone know if a Credit Suisse customer had dealings in Chile?