Let’s work together: miners look for price | Australian Markets

Lithium heavy hitters Liontown and PLS have talked up the potential of working collectively to unravel the price volatility that has smashed miners lately.

Liontown managing director Tony Ottaviano and PLS chief Dale Henderson each expressed help for a joint effort to come back up with a more mature price mechanism that might protect them from Chinese market manipulation of the price of the battery steel.

Speaking on the annual Diggers and Dealers mining discussion board in Kalgoorlie on Tuesday, Mr Henderson stated the lithium industry was nonetheless nascent and lacked the market trading buildings in more mature sectors like iron in coal.

“So where that ultimately goes, I think, is probably the major participants of the industry pulling together to help resolve that,” he stated.

The lithium market lacks a well-developed futures trading market, which means costs are primarily decided through opaque non-public contracts.

Developing a spot trading platform would increase liquidity and price transparency, serving to iron out the wild price swings the market has suffered lately, Mr Henderson hoped.

Fellow lithium giant Mineral Resources has beforehand referred to as for a spot trading market to spice up transparency.

Mr Ottaviano stated he was in favour of no matter it took to see a clear and secure lithium price.

“I’m very much encouraged by what Dale says,” he stated.

“You cannot have a price like lithium on Friday go up $60 a ton, on Monday drop $60 a ton, or in the last three months drop 30 per cent.

“How do you reply? It’s very troublesome to show a ship in such a fast time.”

The rapid market turnaround had driven Liontown down 70 per cent in two years, while PLS was two-thirds lower over the same period.

But after oversupply caused the price of lithium-rich spodumene to plummet about 90 per cent from its 2023 peak, the commodity has recently stabilised.

China was beginning to crack down on its supply glut to protect the sustainability of its own industry, Mr Ottaviano posited.

“We’re beginning to see authorities coverage to maneuver non-public enterprise and state-owned enterprises away from this maniacal push for capability on the detriment of economics,” he said.

Mr Henderson said it was hard to determine whether the lithium price had bottomed out.

“It’s exhausting to call given what we have seen within the market traditionally, with a disconnect to the basics,” he stated.

The pair noticed additional upside for demand, by a pick-up within the use of robots and home batteries, with Mr Ottaviano predicting demand might catch up with provide in as little as one yr.