ORL.to/orocf/ore.ax +C$.56 to C$3.86
I don't think Canadians know any better than us but they are bidding Orocobre up based on pop in Australia last night. Volume is much lower at 180K vs huge 4.5 million shares traded in Australia but similar sized move at 16.97%.
Quarterly report just came out and noted that top twenty shareholders are increasing their positions. Aussies think that shorters realized that Orocobre had institutional support and decided to close their positions. Report is not totally positive because Orocobre has once again delayed the date when they will reach nameplate capacity of 17,500 tonnes/yr into 2017.
However lithium prices have far exceeded the projections of $5,000/tonne that existed when Orocobre built Olaroz mine. Prices have been 3X that level in China. Not sure it's sustainable at those levels but short term, there is a dearth of new supply and demand is growing.
Just like all the commodity markets, lithium will boom and bust. Lithium is not rare so production will rise if prices stay up here. Naturally it takes so long to find, finance and build a mine that the spike in prices could remain for several years BUT there will be an eventual oversupply that will bust prices.
I still like Orocobre because they are the first new supply in years and are certainly several years ahead of their competition. The big industrial chemical conglomerates that control the industry could certainly boost production quicker than juniors so their response will likely determine how long this sweet spot in lithium prices remains.
Until then, I remain long ORL.to and am rooting for electric cars to take off.
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If the Commodities Boom is Over, I am just a Gold Bug headed for the Windshield of LIFE
