Lithium fundamentals continue to strengthen
Since the beginning of 2016, we have observed several key positive industry catalysts. Firstly, Tesla’s March 2016 Model 3 launch, boasting 325,000 orders and equating to US$14b+ of pre-sales in one week. Additionally, we've seen further commitments to building Lithium-ion battery mega-factories, with 12 mega-factories to be built by 2020. Lithium contract prices have also risen further, with large producers quoting realised prices up >25% to US$7,500/t+, suggesting our medium-term Lithium contract price forecast of US$9,000/t+ is conservative. The substantial rise in prices will incentivise new supply, with industry end users and offtakers likely to pursue greenfield projects. The potential for oversupply is a key risk consideration of ours and is dependent on committed and likely new projects both coming online on time AND at design capacity. History suggests that this is highly unlikely. In our April 2016 monthly, attached below, we discuss this along with our latest thoughts on our lithium holdings in the Paragon Fund.
Never miss an update
Enjoy this wire? Hit the ‘like’ button to let us know.
Stay up to date with my current content by
following me below and you’ll be notified every time I post a wire
John co-founded Paragon in 2012 and became principal and majority shareholder from 2017. John is responsible for executing the investment strategy and managing the Paragon Australian Long Short Fund.
John has had 16 years in financial markets, including the last 8 years at Paragon, 4 years at a global resources absolute return fund where he was solely dedicated to the Australian long/short component of the fund, and 4 years on the sell-side which included heading Industrials research.
John co-founded Paragon in 2012 and became principal and majority shareholder from 2017. John is responsible for executing the investment strategy and managing the Paragon Australian Long Short Fund. John has had 16 years in financial markets,...
Expertise
John co-founded Paragon in 2012 and became principal and majority shareholder from 2017. John is responsible for executing the investment strategy and managing the Paragon Australian Long Short Fund. John has had 16 years in financial markets,...
Expertise
Comments
Comments
Sign In or Join Free to comment