PLS 1.47% 34.5¢ pilbara minerals limited

* Yes, AJM and PLS are linked to the Chinese lithium carbonate...

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    * Yes, AJM and PLS are linked to the Chinese lithium carbonate spot price.  However, in a sense everyone is linked to those spot prices.  A40 and GXY have had to reduce their prices.  A40 just recently couldn't charge a US$680/t floor price for its low impurity, high grade ore and likely is recieving closer to the US$600/t that PLS/AJM are.  GXY too has come down.  More generally, even the likes of SQM have had to reduce prices.  Hate as they might, the Chinese spot price, is reflective of the current supply situation.   

    * It's my belief that PLS and AJM started with lower offtake prices than GXY and A40 due, 1) their later arrival into sector which had declining prices 2) GXY/A40 likely had longer term contracts negotiated when prices were stronger 3) accreditation period to prove up their products 4) desperate to get offtakes to survive.  This then fuel the theory that lower offtake prices = lower quality concentrate.  We have seen since both GXY/A40 prices come down.

    * The fact that GXY was getting very high prices for its high mica, low grade product (improved some since) makes it hard to believe that some sort of 'battery grade' significant SC6 premium existed for low impurity concentrate.   

    * As time goes on, more and more carbonate and hydroxide global output will be battery grade.  It's already happening.  This is purely due to the demand growth rate for battery grade demand dwarfing technical grade.  So the spot market will eventually be populated with mostly battery grade products as EV based growth demand for battery grade will dwarf demand for technical grade uses.  As a consequence, this 'lumping of technical and battery grade into one price basket' theory will disappear anyhow.

    * Battery grade comes from the carbonate level/hydroxide level of the production chain, not the spodumene level.  As discussed, while impurities can drive up costs for a converter, battery grade can be producer from all kinds of impurity riddled concentrate.  Some impurities, like iron, are easier to remove than others.

    * Ultimately, PLS/AJM have offtake specification that they need to meet.  They are meeting those.  Read today's AJM annoucement where the company goes on at length that its offtake partners are pleased with the concenrate they are getting.  

    'China marketing visit provided further positive feedback on the quality and long-term demand for Altura Lithium concentrate'

    ' The demand for Altura spodumene remains strong with customers citing the exceptional quality of the Company’s product.  A recent marketing trip to China has reinforced consistent positive feedback from clients with regard to the quality and consistency of the product which is making a point of differentiation in the market.

    'Altura continues to receive positive feedback from its offtake customers regarding product quality.'

    I have seen absolutely zero evidence with respect to both PLS and AJM of any offtake partners claiming problems with their concentrate quality.
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