Sto... today More lithium bottom speculation? Go on then....

Sto... today More lithium bottom speculation? Go on then. Upward-curving contango spotted by expert
Lithium. For better or worse, or somewhere in between, it’s still the limelight-stealing battery metal – despite a rocky time of it over the past several months for spot prices and many a related stock amid supply overstocking/weaker-than-anticipated demand in the short-mid term.
And also despite salt-based plotlines for emerging battery techs which may or may not end up reducing lithium’s usage in an energy-transformed future.Speaking of future, or futures, though – here, look at this, from renowned lithium analyst Juan Carlos Zuleta. Well it piqued our interest today anyway…
At market close today (15:00 China time), average futures #lithium carbonate prices increased by 0.71%, exceeding average spot LC prices by CNY 3,513, & maintaining the contango process that has been going on for 20 trading days now w/o interruption. pic.twitter.com/Z3q8SHy0xv— Juan Carlos Zuleta (@jczuleta) February 5, 2024.
Zuleta, by the way, has been a prominent lithium market analyst for many years, is regularly approached by leading global media outlets for his takes on lithium’s trajectory and in 2020 was appointed executive manager of Yacimientos de Litio Bolivianos (YLB), the state lithium company in Bolivia.Bloke knows his stuff.
According to his analysis, lithium futures appear to be in the midst of “contango effect” trajectory. In fact, he’s been noticing the uptrend for a while – roughly 20 days.Contango? Whatyoutalkin’boutWillis? Contango refers to periods where futures contract prices rise above spot prices. The opposite of contango is known as “backwardation”. Guess contango just sounded cooler than forwardation.In Investopedia’s words:“Contango usually occurs when an asset’s price is expected to rise over time.That results in an upward-sloping forward curve
.”Chinese Li stock prices reacting positively to the spot #lithium price rebound right now. #BYD's stock price improvement is also contributing to this outcome. pic.twitter.com/KtOtucG8MG— Juan Carlos Zuleta (@jczuleta) February 6, 2024You heard it here second, then. The bottom is in sight.
Okay, with the door left ajar for “backwardation” – no guarantees that won’t make a swift return.
While we’re on the bottom speculation, though, Josh Chiat’s Monsters of Rock has the latest from someone/something prominent – Wilsons Advisory. And it’s worth a read. Here’s a snippet:Corporate advisory firm Wilsons Advisory suggests we’re reaching a nadir for lithium prices, with new research showing half or more of the hard rock projects under development would not get built at current spot prices.Wilsons says further downside to pricing is ‘likely limited’.“Despite all the recent ‘doom and gloom’, we believe the fundamental/structural outlook remains robust, and argue that much of the recent news flow is symptomatic of a cyclical bottom in a typical commodity price cycle (i.e. low prices seeing production cuts and development deferrals); and sowing the seeds of the next price cycle,” the firm’s analysis reads.