For those interested, I just had a meeting with an institution...

For those interested, I just had a meeting with an institution who has a very large short bet on Pilbara Minerals. Their perspective:

Unphased by current rebound in lithium prices, they take the view it's a short term restocking event and price won't find much more momentum beyond the current rally.

Secondly, they believe EV penetration in China will continue to slow dramatically. Market is saturated and easy gains have been made. Rest of world will be far slower than China to adopt.

Thirdly, they believe there is more supply coming online and a lot of capacity (lower grade higher cost) that can be used as a "swing" supply should market demand increase.

In summary their view is that it would take a very extreme tail event to see a pricing environment like the one we saw in 2021. So the short bet given valuations is still very asymetric to the downside for lithium.

Don't shoot me as the messenger, this was their views and they have tens of millions short on it. Just thought it was worth sharing.