Just trying to work out when the sector wide steroid injection is coming
SQM came out with its numbers today. Lower production in 2018 (45kt LCE) than in 2017 (49.7kt) and an expectation that 2019 will be 'slightly higher' than 2018 (in terms of sales). Morgan Stanley's oversupply narrative made two big claims.
1) SQM will push out to 160kt in the next few years. Not going to happen.
2) Demand would be at 600-700kt LCE by 2025. This is in contrast to ALB recently prediction of near 1200kt and UBS prediction of 1150kt. EV sale growth figures support the later figures.
Add in (I) all the shortfalls in predicted output and late timelines all over the sector (II) over a year of bad sentiment limiting investment capital into the sector and (III) record EV sales beating expectations (Hi Macquarie!) and the result is that this oversupply narrative is really looking dead in the water now.
Sector has improved on average from its record low near 70% down near the end of last year, to the current 59.8%. Could the sector finally be over the summit of bad sentiment?
View attachment 1462489
