AGY 2.99% 6.5¢ argosy minerals limited

Thanks Launched.... you've prompted me to go read PLS's ANN so I...

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    Thanks Launched.... you've prompted me to go read PLS's ANN so I can read for myself what's what. I found it very interesting... and definitely worth taking the time to read to get an insight into the bigger picture:

    Cherry-picking a few key messages for me:
    "While underlying demand for battery-ready lithium chemicals remains strong, delays in the construction, commissioning and build-out of the Company’s offtake customer chemical conversion capacity in China has resulted in June quarter sales of spodumene concentrate being constrained."

    "Broadly speaking, current spodumene market conditions in China are being tempered by delays in the construction, commissioning and ramp-up of chemical conversion facilities that handle spodumene concentrate supply (being the raw material feedstock to those plants).
    This industry-wide situation is also true for Pilbara Mineral’s Stage 1 offtake customer group, where both General Lithium and Ganfeng have been constructing, commissioning and ramping-up substantial new chemical conversion capacity in the last 6 to 9 months. In each case, this has taken longer than expected."

    "... the demand for battery-ready lithium chemical stocks remains strong, which indicates that the current weakness in the spodumene concentrate market is due to a temporary bottleneck caused by delays in the ramp-up of chemical conversion capacity in China"

    "We remain confident that the underlying fundamentals of the lithium market remain strong – as evidenced by the growing number of agreements being made by major car manufacturers further down the supply chain in both Chinese and global markets, to shore up lithium supply to meet their long-term EV production and energy storage market targets."

    My take-away message: This supply/demand issue is one relevant to only spodumene producers, ie their off-take deals are with converters that take the spodumene, convert it to a product that is then on-sold to consumers further down the supply chain (eg cathode producers and EV car manufacturers).

    The current problem though is that the chemical conversion plants being constructed and/or up-scaled in China continue to experience delays with these works. As a result, at this point in time, whilst PLS have off-take agreements with these converters, the converters are saying they aren't able to take their full projected quota of spodumene until their plant upgrades/construction are completed and they achieve name-plate production. Hence, this so called "over-supply" issue is one unique to the supply chain between spodumene miners and converters.

    However, the underlying demand for battery-ready lithium chemicals remains strong, ie the demand is still there for a final quality BG product.

    So... in reality, IMO, this message is highlighting the continued a supply problem/shortage for final stage customers needing quality BG lithium ready for direct input into the cathode/battery assemble production lines (ie because spodumene converters are continuing to fall short of being able to meet this demand)...

    Ummm... so maybe it's just me??? But this is actually an update that underpins AGY place and value as a producer that will be able to supply a final stage quality BG product direct to the cathode/EV industry, that isn't tied to a middle-man converter?!?!
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