GXY 1.11% $1.55 galaxy resources limited

Originally posted by germaniumHi Bron, thank you! Than this...

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    Hi.Apologies for starting a new thread and a very unsexy thread title at thatand also for this post being as long as War & Peace.I don’t really want to disrupt any of the other threads with this postbut I do have a few things I’d like to say about what has been going onand somebody out there might find my notes interesting or handy at this time.Goes without saying that the last few weeks have been utterly surreal.Morgan Stanley really pulled off the improbable heist of the year at Galaxyand the lithium sectorby a co-ordinated shorting assault and a Everybody-Look-Over-There-Trickat Chinese spot prices while they were dealing with some truly awful low quality Chinese-made carbonate that nobody wants to buy.The quality of some of this recent Chinese brine on the market is so awful that some auto manufacturers are cancelling their ordersand waiting for new suppliers. Hence some bargain basement prices on offer at the technical grade end of the market.The stuff really should go to the lithium grease market - not powering cars etc.The real price picture is that we have seen recent prices of carbonate price of around $16.5k USD/ton. source Benchmark Intelligence. 20th Augusthttp://www.benchmarkminerals.com/ch...-not-the-full-picture-to-an-industry-surging/btw: This link is really worth reading for a better understanding about recent lithium pricingThat’s interesting. This is the last reference I’ve seen to lithium pricingThat is exactly in the range that Galaxy has always used as a conservative price guide.So -What is the big deal about pricing? It’s still higher than AT uses in his own profit calculations and powerpoint presentations.Even more alarming for the Price Is Dropping Crowd - Hydroxide is still holding around $18kUSD/ton. Galaxy supplies hydroxide converters and that price is very nice thankyouverymuchand doesn’t put any pricing pressureon Galaxy’s spodumene contracts that supply these converters. ‘Everybody can make bank at these pricesand supports ongoing spodumene supply contracts at higher than $1000 USD/ton.One thing worth noting is the comment from the above Benchmark link about the recent Chinese spot price."It is an early correction to the lithium carbonate market in China that will go through several phases of growth over the next decade.The growth of anything, let alone an industry that is increasing seven-fold in the next ten years, is not linear. There will bumps in the road as each part of the battery supply chain – from lithium mine to chemical plant to cathode and battery manufacturing – builds out.This will not happen entirely in unison and as a result the road will not be smooth, but the trajectory remains the same."Thanks Simon Moore. Again. I recommend reading the link above for a lot more detail about this pricing stuff.I’ve heard mention that some technical grade carbonate has gone for $13k recently as some justification for this downturn and shorting.That price should not surprise anyone.Some of ORE’s shipments have gone for less over the last 12months.Big deal.Price is dependent on quality, grade, impurities etc.Shocking stuff, I know.If there are shorters that are opening positions on Chinese spot price rationale thenI pity the poor research they have done on this sector.There are a variety of differing price points for at least 4 majorly different lithium productsand sub-grades within those. Lumping them together and pointing at one as an indicator for the entire lithium industry is plain stupid.They deserve to lose those trades.As far as I see in all the recent deluge of misinformation and media hype,all it does is reinforce that Galaxy’s management have been providing accurate but still conservative guidancefrom the get-go, all the way beck to the first really impressive overview I ever saw of the sectorwhen AT gave his speech at the Swiss Mining Institute in 2016.There is nothing I have seen presented recently that suggests that GXY will not need to refactor any of their own price projection work to accomodate the latest price movements in China, nor to feel at all like they haven't every chance of negotiating an incrementally higher tonnage price for 2019 based on the quality coming off the new circuits.Yes. The carbonate price has been over $20k/ton in the last year.But it was never taken that seriously as a sustainable price. Only perhaps by the most over-the-top lithium rampers in spec stocks.Even when it was there nobody made the mistake of using that price to do their calcs.Around $15kUSD/ton has been the standard I’ve seen by anyone with any credibility.But - the main point is - lithium is already Very Profitable and Sustainable at this current price point.And - yes Morgan Stanley - even at $9k USD/ton we’d still be in the game.Bring it on. SDV can produce finished product for around $3k/ton. We’ll see who else survives an attempt at future price squeezing.Anyway.Back to Morgan Stanley’s Galaxy Heist.It was sort of like having the wedding limo for Galaxy and Poscostolen from under our noses right outside the churchand see them hooning off in it to rob a local bank with our money in itwith the Just Married signs still flapping around on the limoand the cans bouncing along in the streets.Audacious as it may have been to the Pin-Striped Suited Floor Tradersit was an utterly bastardly act of pure manipulation and vindictiveness.Crappy wedding present to get as well…There they were - mooning out the back window of the limo to the cops chasing it down the streetbecause it wasn’t really about anything but sheer power to do whatever they wantand ignore all common senseall reasonable valuation metrics.POSCO and Galaxy was the Lithium Wedding of the Year - and they were trashed it like a Mad Max movie set.As a share holder its been a major case of WTF.Yeah. OK. Unreasonable force. Unethically applied. Global media coverage. Uncovered shorts.Unfinished story I sayand that is why I have a Buy sentiment.You guys panic all you want.I will wait this one out. There is a lithium industry to build and Galaxy are the one that is best set up to join the top group of major suppliers.But. Not everyone believes that. Obviously. The share price has been smacked down again.We are currently being skewered for 2 things that currently have nothing to do with us.Argentinian export taxesThe price of carbonateWe do not currently export anything from Argentinaand we currently supply Chinese hydroxide converters.And - again - to top it off. POSCO have reiterated their enthusiasm for their new deal at SDV.End of story.Galaxy = Not Guilty. Shorters have won nothing from me.I wasn’t going anywhere until all 3 mines were runningand maybe not even then - depending on the dividends offered.Those 3 operations have never looked closer to being fully financed and partnered-upthan they have in the last couple of weeks.POSCO have done their due diligence on lithium and the deal is binding.That payment must be factored in to all discussions of value of this stock.But it isn’t. Yet. MS have monstered the press and the bad press is doing their bidding.It is as if that $380m AUD deal never happened.The earnings call was a major highlight for me.It had the last bits of info I needed to understand what they have been working onand how they are thinking about this next phase.I hope that management are able to filter out all the noise they must be getting on the phones from upset retailersand keep focused,because I think the earnings call showed the amount and scale of work that was going on in the Galaxy offices.I hope they can maintain this current set of expansion strategies and calmly work those deals into place for SDV JV and offtake, JB mine and processor and Mt Cattlin’s vertical integration with a processor.I am not concerned about the share price today or any lasting impact of this Big Dip.Selling at $2.50 is not an option to me. No freaking way. I am seeing this one throughand it may even end up having a little silver lining for GXY holders.This volatility is knocking out future competitors left, right and centrebecause it was all started with a misinformation campaign initiated by SQM to do just that - cull the next generation, starve them of finance, survival of the fittest etc.There are a lot of people that want to see lithium companies put under pressure right now.The simple reality is that with no debt and a well-tuned plant at Mt CattlinGalaxy has already established itself as a survivorand will play an important role in the Renewable Revolution.Whilst there is a 17-18% short percentage sitting against Galaxy - all it means is the shorters have robbed the bank but have still got to make the getaway.

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