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Why are lithium prices collapsing?

internationalbanker.com

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Re: Why are lithium prices collapsing?

#31

Post by nprateem »

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.

Re: Why are lithium prices collapsing?

#32

Post by tsimionescu »

rhaway84773 wrote: post #15
226_ebro_treaty wrote: post #9

Earlier quoted context omitted.

Wait until you learn about OPEC and oil prices :-)

I mean, that’s a straight up cartel. There’s nothing surprising about that. But the OP is confused about their comment about commodities in general. They are largely based on supply and demand, but most companies need to predict supply and demand months and years in advance because converting raw material into a sale to the end user is a multi month to multi year process, so a natural result is that the prices are ba…

> They are largely based on supply and demand, but most companies need to predict supply and demand months and years in advance because converting raw material into a sale to the end user is a multi month to multi year process, so a natural result is that the prices are based on speculation of supply and demand, months to years in advance.

But that practically means they are based on speculation about possible future supply and demand, and we are more or less taking it on faith that that speculation is correlated to actual supply and demand.

Re: Why are lithium prices collapsing?

#33

Post by not_your_vase »

Yeahsureok wrote: post #8
Animats wrote: post #4

Much better article in the Economist this week.[1] [1] https://www.economist.com/business/2023/04/20/why-crashing-l...

Really? It seems quite inferior to the one posted and lacking a lot of substance.

Well, at least it doesn't mess with the scrolling, so I have a chance to read it without going completely mad...

Re: Why are lithium prices collapsing?

#35

Post by taneq »

mmiliauskas wrote: post #12
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…

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.

Re: Why are lithium prices collapsing?

#37

Post by benj111 »

Joeri wrote: post #24
bawolff wrote: post #14

Earlier quoted context omitted.

Speculation & gambaling is just second order supply & demand.

And betting at the horse race track is just second order horse riding?

No because market 'gambling' actually impacts the outcome.

You can paint it as a bad thing but there are useful things that come out of this.

If someone wants to 'gamble' that grain prices will be higher in the future, they can buy futures. Where do these futures come from? Farmers today who want a fixed price for their future harvest.

And what about the 'gamblers' who bet that the demand for lithium is going to increase, and therefore invest in building a lithium mine?

Re: Why are lithium prices collapsing?

#39

Post by yunohn »

avianlyric wrote: post #38
yunohn wrote: post #30

Earlier quoted context omitted.

Counterpoint - consumption/sin taxes.

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.

Re: Why are lithium prices collapsing?

#40

Post by mmiliauskas »

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.

If media made well adjusted statements, it wouldn't be the media then wouldn't it :D
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