Labelling it as Covid bubble doesnt do the market factors...

Labelling it as Covid bubble doesnt do the market factors justice.

the spot demand surged on growth expectations and Lithium processors operated on a margin purchasing basis

meaning chinese demand maintained bc they could pass through spodumene costs as they were realising stronger chemical prices

the main sentiment is that during this period some parties built up too much inventory as they overshot growth expectations so has led to a destocking

pair a destocking + supply from funny places at high cost coming online due to high prices you get very poor pricing dynamic both demand falling + supply continuing

only recently has supply started to react to the poor pricing, my belief is that it'll take a while for the pricing to work through the care and maintanence operations.

By that i mean as investment is pulled from both greenfield and brown field expansion + curtailment itll take sometime for this to impact the supply side as producers are likely still selling their last batches now before going into care and maintenance.

so I think supply side won't really die down until end of Q1 and maybe end of H1

i then think demand is a guessing game, no one really knows how much inventory build up is in China as it is all implied. I see a short term catalyst for demand in being US defence being banned from purchasing batteries from chinsese companies such as CATL BYD etc.

this could lead to ex China supply chains receiving some further support from the USA as they try bolster the US defence

The rate cuts are still working their way through different parts of the world, so car sales should slow down as personal finances get stretched - I am slightly concerned the central banks may underestimate the momentum that rate setting/holding can build so i hope they will try target a softer landing but wouldnt be surprised if they try hold out at higher rates