Michael Langford
Executive Director at Airguide International
8h • G
Having worked in commodities and China for ~20 years, what we are seeing in the #lithium price should be expected. China is more exposed to manufacturing outcomes (jobs / capital invested / fund flows) vs raw materials (in particular nickel and lithium). It is in China's best interest to set a narrative of weak demand / subsidy reductions / competition technologies in an effort to obfuscate real demand and set pricing outcomes that benefit their industries.
That being said, Chinese companies are required to make reports as part of their listing requirement. While not always accurate these provide transparency to the on the ground reality.
"BYD forecast net profit for last ear between 29 billion and 31 billion yuan ($4.04-4.32 billion), an increase of 74.46-86.49% from a year earlier, it said in a Shenzhen Stock Exchange filing.
In January, BYD unveiled three battery EV models in Indonesia as it eyes the top market position in the segment in Southeast Asia's biggest economy."
The lithium price in my opinion is being manipulated in the short term. My teams expectation is the price will rebound and due to the inventory destocking rebound to higher highs. While the price drop in the short term might have been beneficial for Chinese manufacturers due to the reduction in stalling of projects it will just lead to high costs in the medium to long term.
A parallel example has been the iron ore price.