Very short memories here. We're already seeing "the lows are in" posted more than a few times on the LTR threads. Sure, it’s possible the bottom’s in, but there are still plenty of headwinds that make me sceptical:
1. Aussie spod is sitting at $612.50, just $5 above the four-year low. That’s not a trend reversal. It’s a blip on a long, slow bleed.
2. Recent reports out of China suggest BYD’s been fudging its sales numbers. If the biggest EV player is inflating figures, you can bet the smaller ones are too. That casts serious doubt on the EV demand narrative being pushed lately.
3. China’s auto market is currently oversupplied and in a full-blown price war. EV production has outpaced demand, and a chunk of lithium use is being propped up by that glut. Not exactly a stable foundation, considering China is the largest current market for EV's.
4. Policy winds are shifting. The EU has delayed pollution targets, the USA is trying to axe the EV tax credit, the UK’s postponed its mandate to 2035, and Canadian automakers want theirs scrapped too. That’s both the carrot and the stick being pulled away from Western EV demand.
5. Tesla sales are still diving, and the brand has taken some serious hits. Elon’s antics; including the whole DOGE circus, haven’t exactly helped EV sentiment in the USA, considering that the left AND the right now hate him.
6. Trump keeps promising a “deal with China,” but it’s mostly noise. China holds the cards on rare earths and lithium supply, and they’ve got no reason to play nice. He’s set 8th July as some kind of trade deadline, but if/when it falls over (and that's a very likely outcome), we could be in for more global market volatility.
7. Tax loss selling usually hits its stride mid-to-late June. With lithium stocks still in the gutter, I’d expect more pressure over the next couple of weeks.
8. Reporting season kicks off late July, and that’ll be the first real look we get at how hard Aussie spod miners have been hit by current pricing. I don’t think it’s going to be pretty once the curtain’s pulled back.
IMO, best case is spot’s found a floor and the sector stabilises a bit. But calling a bottom when spot is five bucks off the multi-year low, with this many risks still on the table, feels premature. I’m sitting tight until reporting season gives us something solid.
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