Re: Good news & Bad news, page-107

Wrt to increase in shorts, I think it's important to acknowledge they represent less than 1% of SOI. The spike in number of shorts over the past 2 or so weeks coincides with the smack down of the sp over same period.

Just putting it out there, during in that 3 week period, there were a few downgrades from 3 notable analyst / investment banks, calling valuations stretched or a top in for lithium prices. If you view lithium price charts prior to that period, prices were flatlining, moving sideways and Andrew Miller of BMI said - Early 2021 volatility has eased but more turbulence could be on the horizon in Q4 as 2022 orders materialize. Acknowledging that the price reporting agencies prices are 2 weeks old at time of reporting, see chart below, which was published on 26th July;

As Miller stated on the 17th of August, the temporary consolidation of lithium prices is likely the calm before the storm, expecting price to keep rising, which they have, with Chinese domestic lithium carbonate prices rising quickly in first 2 weeks of August, per the chart below;


Many of the experts we follow here were predicting that hydroxide prices would reach US$20kpt in the December Qtr this year, well we are already there, 5 weeks early. The supply deficit is the obvious driver of prices, and there is no new supply coming online in the short term to address said deficit, so it's likely prices continue rising.

Back on the subject of shorts, my view is that many started taking positions based on the above 1st chart, which may of seemed like a good idea at the time, but clearly, many analyst are still not well versed in the lithium supply chain. It's interesting that Bank of America (BOA) was one of those analyst calling a top for lithium prices, with a very sloppy analysis, quoting present carbonate prices at $12kpt, only 2 months behind the curve. In their analysis, they downgrading SQM & ALB, and picking on ALB, they downgraded ALB by lifting their price target 30% to $208, but down $20 from $228 it was trading at, at the time. Credible, not from my way of thinking, hope they are decisive, thus panic now and avoid the rush...