If you’re wondering why your lithium-heavy portfolio is tanking on Wednesday, it’s because the heat-of-the-moment spur that put lithium companies back on the map last August has now dwindled out into nothing.
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That occurred when Chinese lithium goliath CATL shut down production at its Jianxiawo lithium mine, which led to a severe overreaction wherein Aussie traders took the chance to jump on momentum that hit familiar names like Pilbara Minerals, IGO and lithium-exposed Wildcat, as the entire market appeared to miss (or knew all too well) that the mine only produced 3% to 5% of global supply.
What good fortunes there may have been in that bungle was that CATL anticipated production to be conked out for the next three months.
Instead, it turns out, that closure would only run for 30 days. On Wednesday, September 10, CATL has announced it’s ready to restart mining.
And the damage is clear. The top laggards on Wednesday were all lithium, more or less. Here’s a survey as of 3pm Sydney time:
- Liontown Resources down -17.4% (78.5cps)
- Pilbara Minerals down -15.4% ($2.03/sh)
- IGO Ltd down -13.5% ($4.14/sh)
- Wildcat Resources down -13% (18cps)
That’s a pretty steep drop for the last remaining basket of companies that most investors would be willing to take a punt on when it came to lithium – not including those who have a fondness for bold decisions. Or, perhaps, the easily misled.
That said, it’s not all lithium companies down on Wednesday. Heading into the final hour, Botanix is actually leading laggards; that former biotech darling, which based its entire value prop on the treatment of an excessive sweat condition, which, and I am not trying to be a hater, never quite sat right with me.
Also down is Iluka, which has revealed it’s mothballing a key mineral sands asset in WA due to poor post-COVID commodity prices; shareholders have sold that off (despite the company’s exposure to REEs, which are still hot now.)
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