“The recent price plunge is mainly driven by weak market sentiment and pessimistic forecasts of the lithium market balance,” said Xiaowei Mei, an analyst at CRU Group. Many traders aren’t sold on the idea that a squeeze is imminent and they’re continuing to build short positions despite the approaching expiry, she said.
"Still, the Guangzhou exchange is “making an effort to minimize the risk of a short squeeze,” Mei said. It has authorized more warehouses to take physical delivery of lithium, adding the depots of Tianqi Lithium Corp., Sinotrans Ltd. and others to its list on Monday, to widen the availability of the metal. If the January contract sees a disruptive expiry and prices whip higher, it could damage the bourse’s standing as an orderly venue for trading."
http://www.gfex.com.cn/gfex/tsl/sspz.shtml
According the GFEX the open interest for the January delivery is 158,612 tones of battery grade lithium carbonate, which is required to be physically delivered by the 17th Jan 2023..
WOWIE
https://www.mining.com/web/lithium-price-slump-has-room-to-run-as-bearish-bets-mount-in-guangzhou/
If the upstream producers decided to take Christmas early, and stopped shipping chemical, how would this effect the ability of "paper traders" to deliver the physical material as per contact? Is there currently 150,000 plus tonnes of excess supply floating around in warehouses somewhere in China?
Smells a lot like the Nickle squeeze experienced last year on the LME.
Sips tea, snaps biccy.
Not advice
