New Lithium Related Article, page-2223

Taken from online AFR article today -
"The pure play lithium names are hit hardest and we believe that the shorting is based around current lithium pricing China, not anything to do with the company itself."Rival lithium producer Orocobre is the eighth most shorted stock on the ASX while Pilbara Minerals is ranked 15th, according to shortman.com.Unlike copper or gold, there is no single global price for lithium, with geography and the chemical state of the lithium product all affecting price.Lithium producers have been reporting sequentially lower received prices for several quarters now, while the most severe falls have been seen in Chinese spot prices for battery grade lithium carbonate, which have virtually halved since they peaked at almost $US22,000 per tonne in the final three months of 2017.Prices for battery-grade lithium hydroxide in China have fallen by closer to 37 per cent since peaking above $US20,000 per tonne in early 2018.

The price falls have been blamed on several factors, including changes to Chinese government subsidies for electric vehicles, which need lithium for their batteries.The falls have also coincided with a dramatic increase in supply of lithium-rich spodumene concentrate from Australian mines.Banking sources say Australia's battery minerals producers have also suffered because of unrealistic pricing expectations created by commercial agencies that collect and publish commodity price information.

Some senior players in the industry believe index prices for small, concentrated and opaque markets like lithium and graphite are often unrealistic and based on small amounts of information, leading investors to be disappointed when producers report their actual received prices.The issue has been particularly acute for Syrah, whose Mozambique graphite was expected to earn a premium over the graphite prices published by agencies, but has instead tended to receive a discount during its first year of operation.

Roskill analyst Robert Baylis correctly called the peak in lithium prices in January 2018, and said Chinese demand had been soft in recent months."We see demand for battery raw materials across the board in China having been weak since mid-2018, but consumption [is] still strong, pointing to over-capacity and stock-building in 2018, creating more price pressure," he said last week.