RE: Blinking heck!!!18 Apr 2018 07:57
Or he's not in this country
Lithium - Market correction, or buying opportunity?
Published on April 17, 2018
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Kiran M.
Kiran M.
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Senior Executive ● Global Mineral Extraction Industry ● CEO at Cadence Minerals
Lithium stocks enjoyed a stellar 2017, with gains ranging from 50-114%. In contrast, Q1 2018 has been a period of under performance, with major producers down between 26% and 16%. Ultimately this was driven by the markets perception of a potential oversupply of lithium compounds to the battery market.
It could also be argued that Morgan Stanley analysts played a role in this downward movement. In February 2018, MS released results of a lithium survey, forecasting that growth in electric cars will be �insufficient� to offset rising supply of lithium from Chile.
MS also forecasted that lithium prices would drop by 45% by 2021, basing its findings on new lithium projects and planned expansions by the largest producers in Chile, which, according to MS �threatened to add� around 500,000 tonnes per year to global supply by 2025.
However at Cadence Minerals we believe MS are fundamentally wrong on a number of counts.
Firstly, the EV industry is a wholly disruptive technology, in the same way that that the internal combustion engine disrupted the horse and cart in less than 10 years.
A disruptive technology completely displaces the incumbent technology (think of the printing press, colour tv, mobile phone and smartphone). This comes about as a result of exponentially reducing cost curves and the convergence of technologies and business models which result in upto a 10 times decrease in costs.
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