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Why are lithium prices collapsing?

internationalbanker.com

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Re: Why are lithium prices collapsing?

#101

Post by puppymaster »

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…

car manufacturers seeing the same sales data would then secure lithium supply 12 months ahead for an expected 12x growth, which then turns out to be only 5x. From macro data pov, the graph is still trending up. This is why guidance is important and also why lithium miners hedge against their inventory using future market. Supply and demand still applies, just that its effect is being amplified by overleveraged commodities trading market.

Re: Why are lithium prices collapsing?

#102

Post by bookofjoe »

nprateem wrote: post #31
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…

> speculation and gambling Of course. The net present value of a stock or asset can only be calculated based on its expected future price and earnings. Since there's no way to know this with 100% certainty, stock prices are inherently speculative. Even value investors must struggle to accurately value a company's intangible assets.

True. Even the master of value investing, Warren Buffett, sometimes suffers huge losses and write-offs.

Re: Why are lithium prices collapsing?

#103

Post by bookofjoe »

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…

"The secret of success in business is to know something no one else knows." —Aristotle Onassis

How do you spell "insider trading?"

Re: Why are lithium prices collapsing?

#104

Post by puppymaster »

newswasboring wrote: post #23
bawolff wrote: post #14

Earlier quoted context omitted.

Speculation & gambaling is just second order supply & demand.

No it's not. Finance bros like to tell themselves that, so that they can justify their place in morality.

commodities suppliers (miners, farmers, distributors) use futures market to hedge against their inventory everyday. Trade exchanges serve a very important function in this ecosystem.

Re: Why are lithium prices collapsing?

#106

Post by lotsofpulp »

taneq wrote: post #35
mmiliauskas wrote: post #12

Earlier quoted context omitted.

I personally have an impression, that commodity prices are a function of shocks. Gas prices in Europe, uranium prices in mid 2000s, lithium due to sudden EV demand, etc. World then adjusts, and prices "collapse" or rather stabilize. Basically, don't buy commodities when the price is high.

That always bugs me when these things are reported. Something goes up 30% in a year due to speculation and/or supply chain shocks, and then drops by 5% and it's "prices crash!" No it's still up ~25% year on year.

Which is why one should stick to obtaining their data from the source and ignore clickbait articles.

Re: Why are lithium prices collapsing?

#107

Post by lotsofpulp »

bookofjoe wrote: post #103
bboygravity wrote: post #46

Earlier 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…

"The secret of success in business is to know something no one else knows." —Aristotle Onassis How do you spell "insider trading?"

My plumber/electrician/doctor is insider trading?

Re: Why are lithium prices collapsing?

#108

Post by ipaddr »

taneq wrote: post #35
mmiliauskas wrote: post #12

Earlier quoted context omitted.

I personally have an impression, that commodity prices are a function of shocks. Gas prices in Europe, uranium prices in mid 2000s, lithium due to sudden EV demand, etc. World then adjusts, and prices "collapse" or rather stabilize. Basically, don't buy commodities when the price is high.

That always bugs me when these things are reported. Something goes up 30% in a year due to speculation and/or supply chain shocks, and then drops by 5% and it's "prices crash!" No it's still up ~25% year on year.

You are looking at different horizons. It might be up year over year but month over month if it trends down that information is more accurate as to where the future price will grow.

Re: Why are lithium prices collapsing?

#109

Post by elif »

Because I see so much "conflict metals" discussion when lithium is discussed, I would like to contribute that less than 3% of global lithium production takes place on small artisanal mines, in which place human rights abuse may occur.

Over 85% of lithium is produced by just 2 international corporations with large scale mines complying with multiple international regulation requirements.

Re: Why are lithium prices collapsing?

#110

Post by yunohn »

jpgvm wrote: post #55
yunohn wrote: post #29

Earlier quoted context omitted.

If you have massive buy/sell orders between finance bro speculators - how does that equate to real supply/demand for the underlying commodity?

There is a finite supply of the underlying, each sold future equates to agreed upon future deliveries. So in reality the number of contracts sold (not traded) does equate 1:1 with demand for the underlying. When that doesn't hold true you will end up with Failure To Deliver (FTD) which causes Very Bad Things™. Generally speaking though commodities markets aren't rigged in the way that people complain about in some ot…

All of what you say could be true - I just find it hard to believe given IRL finance bros are constantly trading and profiting off of futures/commodities trading without a single worry of the underlying commodity.
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