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Lithium “shortage” bubble implodes again

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Re: Lithium “shortage” bubble implodes again

#121

Post by Symmetry »

nativeit wrote: post #66
bee_rider wrote: post #64

Earlier quoted context omitted.

It isn’t obvious to me (although, I am dumb about this stuff) why China would pay more for lithium if they (presumably) use more… wouldn’t we expect economies of scale and all that to make it cheaper for them?

Only if speculators don’t ruin everyone’s fun betting from the sidelines in volumes that outpace the influence of legitimate trade.

If the quantities of Lithium need are going to keep going up its better that speculators big up the prices to high levels now than that manufacturers bid up the levels to crazy high later. High prices get people who don't need as much of it to start economizing and let producers expand production to levels they'll need.

People have, from time to time, experimented with banning speculation in commodities like onions in the US. And the wholesale prices of onions are much more volatile than other vegetables as a result. Sometimes commodity traders cause wild price swings and usually lose tons of money with stupid speculation, but more often they act to smooth things out.

Re: Lithium “shortage” bubble implodes again

#122

Post by throwitaway222 »

jeffbee wrote: post #112
throwitaway222 wrote: post #110

Earlier quoted context omitted.

Actually no, we really did forget how to nail boards together. Skilled labor vanished as other wages rose. Making a new house used to actually cost less than buying an existing one. Today, the calculation has changed, and it is more expensive, mostly because of the labor costs. They're only able to build in areas where there are fewer available jobs so there's no price pressure. Literally people leaving the skilled t…

Sorry but the data isn't on your side. The population-weighted time to get a housing permit in California, as the most extremely bogus example, is well over 4 years. This information is available from California HCD's online dashboard. The driving force behind high construction prices is soft costs and contractor profits. Labor costs in construction have been roughly inline with overall labor inflation across all ind…

From your link:

https://www.agc.org/sites/default/files/Files/Communications...

Wow you're waaaay off. As someone in this industry I am acutely aware of how way off base you are.

Look at answers 4 - 10, the rest of it backs this up too.

I just got a recent permit done in 5 months - plan, submit, approval (submit->approval was 3). ADUs in CA are mandated at 60 days max for approval

Also, outside of CA approvals in some jurisdictions are weeks: https://www.reddit.com/r/Homebuilding/comments/sk3bd2/how_lo...

Re: Lithium “shortage” bubble implodes again

#124

Post by tooltalk »

speed_spread wrote: post #27

Is it sodium battery tech starting to have an effect?

>> Is it sodium battery tech starting to have an effect? It's not yet mass-produced at scale or commodified to have much impact yet. The falling lithium price however could make sodium batteries less attractive.

Re: Lithium “shortage” bubble implodes again

#125

Post by Animats »

mschuster91 wrote: post #105
xkekjrktllss wrote: post #95

Earlier quoted context omitted.

Are you implying that stocks are not legitimate trade? That's anti-freedom.

Trading in commodities futures has a point, but it has gotten absolutely ridiculous in scope. The market participants used to be farm collectives, mining companies on the one and large wholesalers and consumers on the other side as a way for both to hedge against price swings... but that's no longer the case. Hell even if you just look at the last 10 years, trading volume has exploded by ~3x (futures) / ~5x (options)…

There's a lot to be said for this position. Here's an NBER study from 2014 on the financialization of commodity prices. There is substantially more volatility in commodity prices than in the underlying production and consumption. Sometimes, what's happening in markets is going in the opposite direction as the real world commodity.

Another related study.[2] Studies agree that the tail is wagging the dog, but there is no agreement on what to do about it.

[1] https://www.nber.org/reporter/2014number2/financialization-c...

[2] https://americanaffairsjournal.org/2019/11/commodity-financi...

Re: Lithium “shortage” bubble implodes again

#126

Post by bee_rider »

bee_rider wrote: post #64
firebat45 wrote: post #55

Earlier quoted context omitted.

When you look at where the overwhelming majority of lithium batteries are produced, it makes sense to use China as the benchmark (and why it pays more than the US or Europe).

It isn’t obvious to me (although, I am dumb about this stuff) why China would pay more for lithium if they (presumably) use more… wouldn’t we expect economies of scale and all that to make it cheaper for them?

Well, I don’t feel as stupid about this not being obvious to me anymore, given that I’ve got at least four competing theories as to why the price is what it is.

Re: Lithium “shortage” bubble implodes again

#127

Post by sally_glance »

pixl97 wrote: post #109
xkekjrktllss wrote: post #95

Earlier quoted context omitted.

Are you implying that stocks are not legitimate trade? That's anti-freedom.

https://en.wikipedia.org/wiki/Onion_Futures_Act In smaller markets stock trading can turn into a manipulation game completely unrelated to the underlying asset.

Thanks for the link, what a fun story! Was it unrelated to the asset though? The article says

> Authority stated that it was the perishable nature of onions which made them vulnerable to price swings.

I'm just an interested bystander in terms of futures trading and the article relates to some studies which seem to find that even in the very decade of that incident, onion price volatility was decreased. So is there any strong evidence supporting that any small futures market can be gamed?

Re: Lithium “shortage” bubble implodes again

#128

Post by nicoburns »

amelius wrote: post #116
nicoburns wrote: post #39

Earlier quoted context omitted.

It's definitely doable. There are plenty of tutorials out there on the internet. But like others have said, there's plenty that can go wrong if you don't get it right (a fire that can't be put out). Personally I would consider building one myself, but there's no way I'd keep it in my house (it would be going in a fireproof metal shed at the bottom of the garden or similar). And tbh, that's probably more trouble (and…

How do you know the commercial ones are safe?

I mean, ultimately you don't. And there's always going to be some risk (ideally I'd definitely put any home battery in a fireproof location). But a commercial one is at least likely to have high quality welds, be wired properly, and have some kind of QA procedure overseen by someone who knows what they're doing). If there's a systematic problem with the design you are also likely to get notified via product recall, etc.

Re: Lithium “shortage” bubble implodes again

#129

Post by Gibbon1 »

epistasis wrote: post #37

Even with recent price spikes on various component prices, the price of the overall good sold continues its march downwards. BNEF's annual survey showed a 14% decrease in prices (other price surveys will show different results). https://about.bnef.com/blog/lithium-ion-battery-pack-prices-... The single component price, even of the component namesake of the battery, does not cause huge fluctuations in the overall cost…

Thought of mine from 20 years ago is the power available from fossil fuels has been limited since around 1970. Which is it's very price inelastic. And there will never be enough to pull the remaining 2/3rds of humanity out of poverty. The Chinese managed what they did by burning 2/3rd of their total coal reserves in the last 40 years.

But what we're now seeing is the vastly larger availability and price elastic supply of solar and wind power. All this stuff, solar, wind, batteries are getting cheap and commodified. The result is the world economy isn't energy constrained for the first time in 50 years.

Re: Lithium “shortage” bubble implodes again

#130

Post by jeffbee »

rurp wrote: post #108
jeffbee wrote: post #88

Earlier quoted context omitted.

> there’s a lawsuit Exactly my point. All other extraction industries in America are grandfathered in from before NEPA, before anyone gave a damn that a dead guy from the far past thought the stones were holy. America is paralyzed by its own legal system which can be wielded as a weapon by any bad-faith actor who doesn't want electrification to happen.

Is it really that unimagineable that some people would rather not see this large area of natural land destroyed, and have to live with the resulting externalities of the mine? People who hold different values than you aren't all evil beaurocrats who hate electrification. Many of the folks opposing this mine are strongly for green energy projects in general, but clearly prioritize certain tradeoffs differently than yo…

I'd believe that if there seemed to be any analysis of alternatives. The area of the United States that has been completely wrecked for oil and gas is way, way bigger than the area under consideration for lithium extraction.
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