Here is a stab at a potential sector recovery. Chinese spot...

Here is a stab at a potential sector recovery.  

Chinese spot prices are approaching a similar low as in May.  



At these levels, numerous sources of Chinese LCE production (figure 1) become uneconomic, namely non-integrated spodumene producers and non-integrated low-grade lepidolite miners.  It is theorized that a similar situation occurred in May as these sources had to shutdown.  We will see if this occurs yet again, and we get another bottom around this range.  The peak EV selling season is also Sept to Dec, which will push demand.



According to the Macquarie paper, 275kt LCE is tied up in these high-cost producers in China and they likely represent a bottom for lithium prices as they are forced to go offline.  We will see.