All of these are possibilities given how awful the lithium macro...

All of these are possibilities given how awful the lithium macro sentiment is right now. However, I personally think lithium prices are now trading back and forwards at what will eventually be seen as the bottom of the crash.

- Carbonate prices largely flat for 3 weeks now (between 95.5k and 98k CNY/t)
- Futures curve is more or less supporting the current carb spot price
- Stock market is forward looking and any hint of a bottom in Li prices is going to mean big money flips their trade
- Speaking of forward looking, LIT has (so far) found a level of demand - possibly suggestive of a turn around from here.
- The post CNY holiday period has historically seen demand pick back up again from China (mid to late February 2024)

My rough theory
Having said this, it's a matter of timing and I personally think that the culmination of the short trade is going to be the quarterlies due later this month and the month or two following (which if true, also means that there is potentially one more significant drop coming for majors like PLS, SYA, CXO when they show just how bad their sales prices have gotten). Shorts will use this selling volume to close out their short positions.

Although I think there is a bottom somewhere around these Li price levels, it doesn't mean Carb and Spod prices have to go back up in a V shape. They can just as easily track sideways for many months at current levels without much of a gain.

With 21% of PLS still held short, big money clearly still sees at least one major negative catalyst coming down the road in 2024 for lithium. Hopefully they are just waiting on this upcoming round of quarterly reports before they close (and not waiting for something at the back end of 2024).