[Music] I'm Priscilla Barrera with the investig news network and here with me today is Joe Lowry of global lead team Joe thank you so much for joining me today thank you for having me all right so we are here at the 15th fast markets lithium supply conference so to start I wanted to ask about the first time you attended this event how has the conversation from back then change or remain the same in terms of lithium supply and demand Dynamics I attended the very first one in Santiago Chile and I remember very well


a commented Patricio salmaniac made about the reason they were having it because we wanted to prove that there was the capability to supply enough lithium to meet the future needs and that was kind of the whole message was that you don't have to worry the people that are here are capable of doing it and that was wrong and as much as I respect Patricio nobody could see where this was going because we had there was the big three back then and literally The Big Three operators believe that the


Atacama was almost enough and then you know whatever FMC had on the other side of the Andes was you know and we weren't talking about China that much because it was it was more that there wasn't even a lot of conversion being done there so totally different circumstance but the message was really to get it out to the world that yes the people in the lithium industry can supply your needs and we've seen that hasn't really worked out too well at different times that's right so now


speaking specifically about 2023 has anything surprised you so far this year when it comes to supply demand Dynamics so as well and has your forecast remained the same since January yeah I I take a longer term approach most of the narrative the news narrative what people pick up tends to be the short-term thing worried about what inventory levels are in China or de-stocking discussions that happen every year this what's happened this year was maybe more in Spades because of zero coveted a lot of other extraneous


factors that that made the first few months this year a little bit different but to me there's always been a seasonality in China this year you saw CHL and byd take direct steps to try to talk the price down I've talked a lot about it on my podcast and what I write so that that didn't really surprise me what surprised me a little bit was how quickly the spot price came back and there's um when it comes to prices as you're mentioning uh do you expect we will continue to see this price volatility uh


going forward and I guess have any Catalyst made you review your price expectations even long term uh this year I think the biggest issue for me is having enough courage to say what I really think is going to happen it's it's really easy when The Narrative goes against what you're having to say to like revisit and say am I right am I wrong and you should always be asking yourself are you right or wrong but my point is that even what we heard this week from some of the speakers it tends to be a skewed narrative


they'll say this is the China Japan and Korea price it's not they tend to show the Japan spot price and characterize it as the Japan Korea and if you look at the import statistics of Korea and Japan the price is much higher and it stay it stayed high and there's a huge disconnect when people are showing slides here and showing it's the the low point was below three it wasn't below 30 in Japan and Korea and it hasn't been so for investors that are new to this space who might have new audience maybe even


coming from other other sectors that are not battery Metals what do you think is the most important thing to understand about lithium prices and what should be a mistake that they need to avoid when thinking about lithium pricing in general I think you hit it on the head when you pluralized it so its price is there's a spectrum of prices there is not a lithium price and it's not just about battery grade or non-battery grade there's a spectrum of price based on how things are contracted based on when they


were assigned based on the different indexes people use last year the dispersion from low to high price was over 70 dollars a kilo this year I think it will be less than that it might be the dispersion maybe 45 and every year as we see indexing mature as we see the way people contract mature you're probably going to have a narrower narrow band but there's never going to be a lithium price um and we know there's an enormous amount of demand expected and there are many companies trying to bring new


Supply online with as an investor with that mindset what do you consider some red flags when looking at companies developing lithium projects or trying to expand current operations I I think the red the red flags are really if you learn how to analyze this business you see in the PFS there's always more optimism than it's warranted it's it's endemic to the industry when they talk about qualified QPS there are QPS that'll sign just about anything so I'm a little I've always


been skeptical about that I think really what you need to you need to look at the milestones and see when the miles first Milestone slips then you start looking at the next one and the next one and it's we we this week we had an announcement that one of the projects a lot of people talk about and about dln about how fast it is and it's slipped another three years in one announcement that's and there's also been a lot of talk about legislation so I wanted to ask you do you think legislation such as the U.S


inflation reduction act and even the EU critical minerals minerals act has been positive for the industry and what do you think is still needed from governments when it comes to supporting the build out of resilient Supply chains I think it's absolutely been a positive however you have to caveat the positive because people tend to get euphoric about something that is not fully baked as we like to say and I think the IRA is a perfect example of that there's a lot of questions about will Argentina


become acceptable material will what will happen with Chile and with what everybody's talking about oh chill Chile has a Free Trade Agreement everything's great and then the president decides he's gonna try to interject his uh national government and on strategic lithium projects which were literally not defined and the government wants 51 percent of new strategic projects but they don't say whether they're paying their share of the capital there's there's just so much uncertainty out


there that I think you have to look at what the U.S did and what the eu's done as a general positive but the devil's in the details we always say that and in this case it's very much true and finally there hasn't been a dime in the U.S yet given to Upstream lithium production there's been some commitments to conversion but you can't convert a lithium value that doesn't exist and yeah my next question was actually about um Chile's recent move uh to take more control of his lithium industry but also


wanted to specifically ask you and get your thoughts on the country favoring projects developing um direct lithium extraction technology so how optimistic are you about dle and what DCS the main challenges of this technology well long term I'm optimistic that dle will happen I can't tell you what year the the devil's in the details here too it's a bespoke technology has to be customized to the resource people tend to think of dle is a drop in only once once they have dle that works


then it'll be great and all these projects will happen well they won't necessarily happen because if you have a very different type of brine or you have a very different impurity profile you're going to have to have a different dle so I think I always use the analogy to people tried to break the four minute mile for decades and then when Roger Bannister finally did then a bunch of other people did in the next year and a half there was in I think I think we'll see that with dle but I'm not confident


I can't call the year I don't know whether it's 27 28 31 I just don't know and uh we've talked about getting supplied out of the ground or brains but another interesting topic is conversion capacity we saw a graph at this conference showing more Ira compliant resources than conversion capacity what do you think are the challenges ahead to build conversion capacity outside of China I think people overblow the long-term challenge I think in the short term is there's a real Challenge and a


lot of it is just this is a small industry that has to grow 10x in a decade we don't have the talent pool and when you're training a town a group of people they're going to make a lot of mistakes and they're going to learn from their mistakes but we have to live through the learning process and anybody who thinks just throwing money at it's going to solve the problems doesn't know the history of the lithium industry I was I was going to also ask about the lack of know-how which has also been a


recurring theme at this conference do you think Partnerships could help address this and actually how do you expect to see Partnerships evolved throughout the supply chain I think you Partnerships have been critical the whole history of the industry if people understood how just the big three allocated Capital One would invest in one part of the industry one would invest in something else there's always been Partnerships what I haven't liked to see is the all the China bashing where China has skill


sets that the rest of the world can Leverage and if we don't do that I think it's myopic to think you can just cut China out because you're going to try to cut China out in the next 10 years you're just going to be disappointed because that's not going to happen I think what people really miss is I don't like the fact that China dominates conversion right now I want to see it become more balanced but what is once it is more balanced why wouldn't you watch How to competing with everybody else why


wouldn't you want an additional competitor that has a skill set and the final thing I would say about China is people think that China has a special gift for conversion it took them 20 years to develop that skill set they were terrible at making hydroxide when I was living in China they couldn't get qualified now through brute force and a lot of hard work and you know people people shouldn't take it away from them that they they invested ahead and occur they developed a skill set we're going to have to do


the same thing but I I think just saying we want China free Supply chains is is childish all right Joe my last question for you today this is for the investor audience that is listening today would you be able to share any maybe any key lessons you've learned this past year when it comes to investing in lithium or any other final thoughts you want to leave the audience with today okay I I think you have to have the strength of your convictions but I also think you have to adjust your thinking for circumstances I used to


always say I didn't like the way Albemarle was managed I won't buy Apple moral stock when President borage came out and the stock dropped that was an obvious buy and I had to be humble and just get yeah I bought Albemarle today and I'm probably gonna buy it again tomorrow and I did the same thing I've been a long time investor in sqm over the years since they've had adrs that stock got hit very hard I was I was out there buying so it's like don't get married to prejudices or assumptions


that you have be flexible and always go for quality thank you so much for joining me today thank you very much [Music] thank you for watching if you like this video make sure you subscribe to our Channel we'd also love to hear your thoughts so leave us a comment below we'll see you next time foreign [Music] foreign