The production ramp up at Kathleen Valley is well underway with LTR having completed its maiden spodumene shipment and first spot sale in late September. Encouragingly, the spot sale was completed at a price of US$802/t, a premium to benchmark spot prices at the time. We believe this spot sale points to improving sentiment in the sector and we retain our medium-term bullish outlook for spodumene prices. However, rising Chinese owned supply has weighed on sentiment in the lithium sector, and we have reduced our medium-term price peak assumptions to reflect higher supply levels than we previously anticipated. These changes translate to material cuts to our medium-term earnings outlook for LTR, with our forecasts falling 4-18% for FY25-FY29. However, with spot prices expected to rise, we lift our price target by 8% to A$1.30 and reiterate our BUY rating.
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