Thanks for the update on lithium and glad to see other subscribers are interested.

What I cannot understand is how Tesla can build a giant factory in Nevada, start buying contracts for lithium in large quantities over long periods of time, and not move the price of lithium. Grid and home storage is certainly a new market, and the old market hasn't been shrinking. If the market has been in rough equilibrium over the past few years (which I accept it seems to have been), then such a large new demand would logically move the dial. A puzzle for sure.

Elementis may not talk about it's lithium production for another reason. The fact is that their mine is located on the 29 Palms Marine Base. The US military has a substantial strategic interest in stockpiling lithium, as they use batteries in just about everything that goes into combat (including smart bombs and such that are consumables). It is possible that they contribute to the strategic reserve of lithium in exchange for or as some part of their contract with the US Government. Just a thought, with no facts except location to back it up.

Thanks for continuing this idea thread.

Eoin Treacy's view

Thank you for these additional comments. 

I agree Tesla is going to represent a major new source of demand for lithium and it will not be the only new consumer. However there is a lag between building the largest battery factory in the world and when it goes into production. I am watching the lithium sector because there is a growth story developing but the question is whether now is the right time. 

Everything energy related is being sold at present which is the very definition of indiscriminate contagion selling. That’s an emotional rather than a rational response since oil prices are already at depressed levels. However it may take some more time for investors to discriminate between distress and value.