OTCQX:NTTHF - Post by User
Post by
superscepticon Jun 18, 2019 9:50am
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Post# 29835299
problems now = high return later
problems now = high return later - Demand is growing at 20% despite of constraints and slow US and especially Europe EV rates
- Supply is growing due to SQM, China, and Ausralia expansions. These are Ok to meet gradual demand increase, but have technical and economic limitations
- New entries limited to ORL, LAC, Kidman will help, but ORL proved it need time and has defined ceilings of production
- Practically all new projects are chocked by lack of investors' interest, due to oversupply fear, any sudden surge in EV demand will reveal such short sightness
- EV demand limited by fear of mile range (their prototype development is already past tense) and price (that keep fallen steadily and cross point is not far away), carbon tax becoming mainstream.
- Therefore, surge in EV demand is nearly guaranteed, but only China, Tesla, VW, and Toyota are covered
- Technology that created enormous increase of Li batteries capacity for EV will be used for energy storage, matter of buying patent. Now, average storage will keep you 3 days, new tech will be good for 3 weeks for same price. What will happen to powerwall demand? Every powertool or even smartphone will benefit
- Although, new Li tech (solid states, new chem. mixes) is to be launced in 2021-2022 date of actual potential shortage or its perception is unknown. Inventory planning is right after design stage and panic may start when SQM will start turning down new l-t contract due to capacity limitation.
- No immediate "threat", but can happen when Mercedes, Apple and 40 more smaller manufacturers ask for Li increase within same quarter.
- Already happened when iPhone was introduced and Apple grew 300% per quarter
- Fast increase in Li prices and investors competition will boost s/p to most promising companies that are closest to production
- Nearly all analitics,even Li pessemists predict problems with supplies, the difference is only timing, from 2022 to 2026. Again, inventory building and contract signing always done ahead of time, unlike investors, manufacurers cannot afford to look at next quarter only.
Conclusion NLC should be selective now and not take any possible deal, just to have get over with it. NLC should reduce spending, even if it means production delay to preserve cash. New dilutions just to drill more, since drills are so successful (will end up as good return on investment).