It is not just Pilbara that is being greatly shorted. GXY, ORE and to a degree MIN have also been under some short attack. IMHO the shorters are taking a stand against the price of lithium in the future, they prefer to believe the oversupply situation over the story of a rapidly growing market.
GXY has just under double the percentage of shorts compared to Pilbara, but were just given a shellacking with the sale of a non important asset for $280m. The main weakness with GXY is the relatively short mine life of Mt Caitlin with only 7.9Mt in the reserve, but they are undergoing a major regional exploration program and are likely to find further spodumene keeping that plant going for years (IMHO).
Last year shorts were over 20% of ORE's shares, down around the $3.20 level in June/July. It was mainly short covering that helped the SP rise to over $7 at one stage, and allowed them to do a deal with Toyota for $7.50/sh. Even there short interest has risen from 6.5% to over 11% since January.
Even MIN has had short interest rise from less than 1% to around 4% over the last couple of months.
I suspect the shorting is coming from the US where the take on EVs seems to be different to everywhere else. Tesla has fallen in price from $360/sh in January to about $280/sh recently as questions arise about their production abilities and debt levels. In the US it seems that Tesla is everything about EVs, while not paying enough attention to what is happening in the rest of the world. The investment banks in the US seem to have lower growth rates assumed for EVs than what the car manufacturers outside the US are planning and spending money developing.
In the US Albemarle have 11%+ short interest, SQM have over 22% short interest, so it is not just us that shorters are taking aim at. It is the entire industry.
http://shortsqueeze.com/?symbol=SQM&submit=Short Quote
As lithium batteries continue to be used in greater quantity than those IBs in the US forecast, IMHO there will eventually be a reversal in what the shorters are doing, most likely causing lithium boom 3 as the price of lithium products rise BECAUSE the high short interest will have reduced potential production increases. As can be seen by the shorts covering in ORE last year, they can and do get it wrong!!
Another possibility, not far off the realms of conspiracy theory, is that oil interests in the US (and maybe around the world) are deliberately targeting lithium miners to stop the rapid development/uptake of EVs as they see an EV future a huge threat to their industry.
Much more likely than that though, is that they believe their own rhetoric about the recent tight oil (shale fracking) growth (and so do the IBs) as producing long term cheaper oil, so EVs will remain too expensive on a relative basis and consumers will not go for them.
Whatever the reason, IMHO the shorters have made a mistake on the short and long term future of lithium development, and all they will do with keeping a lid on the SP of lithium miners is hinder mine development, almost guaranteeing higher lithium prices as demand 'surprises' (them) to the upside over the next few years.
(20min delay)