Thanks, great summary P1.
My Sunday thoughts:
1. Identity of shorts- I cannot get over the enormous shorting at both LTR and PLS. For that reason, I suspect it is strategic, and possibly not commercial. I suspect it is China Inc. in both cases. The huge bets do not have the commercial feel, of a rational bet. Particularly, the absence of any panic buying of LTR when any chance of a CR evaporated, looks very odd. The counterparty (stock lender) must have comfort of the creditworthiness of the shorter(s). Maybe a major financial insto is fronting this, and talking down li prices at the same time. Simply, more than 80 days average LTR trading is an enormous volume, particularly when little spivs like me are also wading in and buying more. If Gina bid even $2, the losses on shorts would be enormous. It does not feel to me like a handful of Regal types would coincidentally take on this level of Li risk, in an opaque market, yet not one breaks ranks on the LG announcement.
2. Regulation of shorting market- I am probably ok with shorting, on balance, but it seems to me the market should be much more informed of short positions, including the identities of material shorters. How can it be justified that LTR is 10% shorted, but we don't know identities, whether strategic or even planned bidders?
3.. Chinese index prices- these mean almost nothing to me. The volumes bought and sold are unclear, and in particular the Australian hardrock volumes participating in trade must be very low. The ability to manipulate trading, by subsidising some bidders privately, and then reducing global prices, is clear. I think Aust Govt needs to step up asap, set up regular Australian hardrock pricing auctions, along the lines of cattle auctions, where lots of known origin and quality are separately bid for, including of course separate IRA lots. The Government could mandate all Aust producers to regularly participate, and over time, international suppliers could be asked to join in. Simply, we must take this aspect of market discovery away from the Chinese, whose vested interest, and dearth of quality spod of their own, is clear.
$. KV- I was very heartened that LG has now undertaken its own DD and made this major commitment to KV, including a desire for a refinery joint venture. This supports LTR's restatement of 'on time and on budget', but also implicitly KV's cost competitiveness over time. As LG said in announcement, it wanted IRA product. Given its need for scale, where exactly else could it have gone to satisfy that this year, or next?
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