Lithium sentiment is very similar to the iron ore in late 2015 where hit US$39/ton, all institutions were doomsayers. At that time, iron ore outlook was much worse, very mature market, massive new supply from FMG and Roy Hill, but iron ore price bounced as high as US$95/t in 2016, where GS predicted "Beyond 2016, Goldman left forecasts unchanged at $35 for the next two years."
Similar crude oil, dropped below zero in 2020, we should get a free pump fill, but oil price rose to US$126/barrel.
Lithium carbonate price dropped from CNY600k/t to CNY85k/t, that's 86% drop, worse than last two massive drops in iron ore cycles, just second to short lived Negative crude oil price drop. The reality is, both iron ore and crude oil, bounced hard, and stays at a much higher than major producers' production cost.
Lithium price will and should bounce hard in 2024, it's inevitable, imo.
China has learnt lessons from losing pricing control over iron ore, so they set up lithium futures in Wuxi and GZ, that does work well, to bring price down. Just not long ago, some rumors like BYD bought six mines in Africa, even sodium ion batteries will be better than LFPs, but after two years of CATL releasing sodium ion battery, CATL only started to equip sodium ion batteries in small EVs, but sodium ion batteries are mixed with lithium ion batteries, not pure sodium ion batteries. Anyway, what they have done, is successfully bringing down lithium price, by ~80%. Unfortunately, that's the life. But it will reversing to the mean, it's inevitable.
Open interest in GZ lithium future contracts LC2401 is currently standing at 120k (120kt LCE). Vs current total inventory of 55kt LCE.
All imo.
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