Lithium stock rally could be short-lived if spodumene price reverses
Bullish traders who have been riding the dizzying rally in lithium prices are starting to take profits as brokers warn that China will unwind supply cuts in the coming months, leaving the physical market stuck in a surplus.
Citi’s commodity desk has this week advised clients to start building “bearish exposure” to any further rallies in lithium carbonate prices over the coming months. That’s after prices on the Guangzhou Futures Exchange sank by the daily limit of 8 per cent on Wednesday, and eased further on Thursday to 82,040 yuan a tonne.
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