The big lithium short gets ‘dangerous’ on lower supply outlook | Bloomberg


Short bets worth billions against some of the world’s largest lithium producers are under threat as a supply glut shows signs of thinning.

UBS Group AG and Goldman Sachs Group Inc. have trimmed their 2024 supply estimates by 33% and 26%, respectively, while Morgan Stanley warned about the growing risk of lower inventories in China. The revisions come after lithium prices cratered last year as supply ran ahead of demand, with some producers cutting output.

Now, prices of the key material used to power electric vehicles are showing signs of a revival after the rout last year sent stocks spiraling and attracted short sellers. Bets against top producer Albemarle Corp. and Australian miner Pilbara Minerals Ltd. account for more than a fifth of their outstanding shares, or the equivalent to about $5 billion, according to data compiled by Bloomberg….