And yet there are still 20% short on the company.I'm not sure...

And yet there are still 20% short on the company.

I'm not sure using PLS as proxy for the Li spot price as a trading tool is a great idea. It is a business in the end and the nuances, as you have highlighted on its position in this space mean there are plenty of investors prepared go long and just hold. So not sure what will give them an exit at much lower prices if funds like AusSuper are prepared to buy dips. They won't run out of money and can match any BEOT shorter volumes selling to them.

If the Li prices get any worse, I can see PLS picking up some of the cheapest undeveloped Li assets we will likely see in our life times. That would give it a huge capacity upgrade for the coming years (they can just land bank, if they choose to). So makes no sense for it to be shorted at 20% as an Li price proxy when the Li price is currently at the marginal cost price for a large proportion of producers, whilst PLS it is still cash flow positive on ops at these prices.

It may seem counter intuitive but if prices remain at these levels for more than another 6 months, it will kill off enough future supply to almost guarantee a sling shot price recovery. I think even BEOT will be smart enough to know to run for the hills on their shorts in PLS if the prices stay low for much longer.

This apparent bull flag defies all logic unless you believe lithium will be replaced by another form of battery or we go back to ICE. Looks more like a topping pattern to me. A triple top pattern has a 77% success rate.



Is there another leg down in Li prices? To where? The move is complete. Yet, the shorts think there is another leg down based on their positions, if they are using PLS as an Li spot price proxy. These two graphs are showing a major 'divergence', imo.

And that completes my thesis why PLS will not see any significant volumes at lower prices. And why any small upturn in the Li spot price could trigger a stampede for PLS shares fueled by long, shorts and hedge funds/traders recognizing the high probability short term direction. Many eyes (outside of retail) are on PLS, waiting to pull the trigger.