Good News & Bad News, page-31854

Where are shorters going?

Ticker	Company	Short %	Prev	% Chg
STA	Strandline Resources	1.73%	0.65%	1.08%
PLS	Pilbara Minerals	7.53%	6.71%	0.82%
LYC	Lynas Rare Earths	4.84%	4.09%	0.75%
GMD	Genesis Minerals	1.64%	1.01%	0.63%
IGO	IGO	3.26%	2.63%	0.63%
CCP	Credit Corp	5.28%	4.78%	0.50%
PPT	Perpetual	2.28%	1.82%	0.46%
BUB	Bubs Australia	1.63%	1.21%	0.42%
SLX	Silex Systems	2.79%	2.39%	0.40%

Pilbara Minerals: a little squeeze

Pilbara Minerals has seen short interest rise dramatically over the past couple of months:

• 1-month ago: 6.2%

• 3-months ago: 5.6%

• 12-months ago: 1.8%

Here are a few reasons as to why investors are bearish on lithium:

• Lithium prices continued to unwind after a brief bounce earlier this year. Chinese lithium prices fell below 265,000 a tonne at the start of August, the lowest in over two months.

• Lithium miners are guiding to lower earnings amid the pullback in prices. The US-listed Albemarle said “as prices decline, we are realising lower lithium prices faster than lower spodumene costs, and we expect the majority of this impact is going to recur in the third quarter.”

• Tesla’s China-made EV sales fell 31% month-on-month in July, according to the China Passenger Car Association (CPCA).

On Monday, Pilbara Minerals upgraded its resource estimate by 36% to 414mt at grades of 1.15%. The stock finished the session up 4.9% and rallied another 2.7% the next day – Leaving it just 6% off all-time highs. These gains might be exacerbated by potential short covering, which we’ll see next week.