One thing to add from a trading the lith names, best to think about a matrix of criteria that is set against the core principle of a commodity cycle turn, best R&R on the SHORTER term horizon is with producers who benefit now from improving pricing as this is where timid risk capital goes first.

So order a list of lith names going from producers through to explorers. Focus on the best cohort which is producers and advanced developers with good size mcaps (i.e. tradable for instos). Make sure they are well capitalised so you don't get "surprised" with a raise from a quick pump.

$PLS shareholders certainly liked the news today based the closing ASX price. Thanks @Randy for the detailed post and @BkrDzn for the follow-up info.

Disc held on SM and IRL portfolios

Drones have been hovering above the mine to monitor its conveyor belts and potentially catch a change in its operations, according to two traders who attended a conference held this week in Yichun, China’s lithium mining hub in Jiangxi province.

Flying drones over the mine site. Isn't that bordering on insider trading by the commodity traders

Talk about desperation....

Hedge funds been using satellite imagery for years to determine stockpiles, truck movements etc of companies. There was a doco must be 7 years old about how these American hedge funds were finding these dodgy Chinese companies which turn out to be all frauds. They discovered it by satellite imaging noticing there were no truck movements etc at the factory’s. Still I agree bit cheeky flying drone over the mine site but guess no different to you paying for daily images from planet labs.

Just a musing ....

I owned PLS shares for 18 months a while back. Bought at $4 and sold just over that as it started to wind down. I've maintained an interest in the company (have a parcel still in SM) and the mineral more generally. Whilst I do grasp the dynamics of increased demand through EV and energy, driving increased supply and therefore ultimately improved trading conditions and SP for PLS and the like. The recent activities in China, closing supply there, is not a structural change in market conditions, as yet (thank you Strawman for the recent structural V cyclical conversation on the pod). Not a permanent one I don't think. China periodically enforces actions against companies, and sometimes whole sectors, as we have seen in property and tech. But they still dominate supply of Lithium, and in processing of it. Are they changing their long applied strategy of manipulation, foresight and investment to confirm to the ways the west applies to markets? I'm not so sure. I don't see them wanting to give up their control. I do imagine they would reinforce it still if they could. Short term I do see recent news from China driving SP volatility, but is it the bottom and everything is up and to the right from here? Again, I'm not so sure. I remind myself that there is quite a lot of lithium around, and several mines on maintenance hold that could reasonably quickly be brought back to production around the world, including here in Australia. No question PLS is a well managed company, positioned well for low production costs through economies of scale, and with a good strategic partner and processing facility in Korea. But....are we at the point of inflection yet? My perhaps flawed and wrong feeling is we are still bobbling along for a bit, no matter the PLS SP rise in recent days. I'm not in the buy and hold mood just yet.

All good valid points @Scot1963 and absolutely think your right about caution being warranted around picking a structural change in Lithium / price bottom.

I agree there will be additional supply sitting in C&M ready to come back on if they feel it'll be profitable in a stronger future pricing environment. That is exactly why I believe we're unlikely to see a repeat of the magnitude of the 2022 lithium boom (stratospheric prices), but do believe higher pricing will be needed to coax out a sustainable increase in supply to match booming demand.

Without fair incentive pricing, there won't be additional sustainable supply. But what is that sustainable incentive price - hard to say - but for any additional Aussie Spod to come on I would hazard a guess of sustained levels of US$1100-$1350/t. For quality brine assets probably less - but I think they are going to run up against a number of environmental constraints primarily with respect to water, and DLE despite its promise, is still yet to live up to its hyped potential.

As an aside - a fascinating article in last night's AFR regarding the Hedge Funds positioning & thinking who have done a lot of the damage to PLS & LTR. Sounds like they're currently not intending to blink - and are backing your thinking around China's CATL mine outage being more temporary in nature. Still sentiment is a fickle thing, and a lot can happen in the Lithium space in 3 months - so personally I'm expecting some volatility & potentially a bit of a short squeeze (perhaps from other Hedge funds knowing the big short position and changing narrative could provide an opportunity to squeeze them). Guess time will tell!

Lithium supply squeeze smacks hedge funds’ big short on Australian miners

@Randy I get the short squeeze concept but you have to be quick on the draw I think to get the price whilst its hot, rising as the shorters recover any position they have away from that company. And my bot isn't as good as their bots. So that doesn't distract me - it is another source of noise I suppose. But as you say anything can happen. The Macro is something I gravitate towards more than the micro, so where is the market going rather than specific valuation scenarios calculating from company figures. probably because its easier for a slow thinker like me. Considering the natural bias towards finding news that supports your worldview I read this today, below, from Forbes. Maybe right maybe wrong - but as you wisely illustrate the pricing of the commodity drives the value of the companies trading, producing and processing that commodity.

https://www.forbes.com/sites/timtreadgold/2025/08/12/lithium-recovery-could-be-a-case-of-too-far-too-fast/

Lithium Recovery Could Be A Case Of Too Far, Too Fast

ByTim Treadgold,

Tim Treadgold is an Australian journalist specializing in mining

Aug 12, 2025, 10:35pm EDT

Electric vehicles can be quick off the mark thanks to the instant power released by their lithium batteries, but it could be a case of too far, too fast, for lithium miners which have rocketed this week on reports of a big Chinese lithium mine being ordered to close.

Australian listed Pilbara Minerals is up 34% at A$2.28 while IGO, a partner with China’s Tianqi in the world-class Greenbushes mine, is up 15%.

Both have benefited from the temporary suspension of work at the Jianxiawo mine operated by the world’s biggest manufacturer of batteries for electric vehicles (EVs) China Contemporary Amperex Technology (CATL).

According to reports from China, CATL failed to extend a mining permit which expired last week, sparking speculation that a massive surplus of lithium overhanging the market could soon start to fall with a future shortage and higher prices possible.

Investors with an appetite for lithium and other battery metals such as nickel and cobalt have been hoping for a recovery since prices started to collapse three years ago, eventually dragging lithium down by 80% and forcing mine closures around the world.

Chinese mines were largely saved from the worst effects of the crash but are now seen as being guilty of over-production.

An added problem for battery makers is that while the Chinese market for EVs is hot the rest of the world is less excited, and the U.S. is proving to be reluctant to switch from internal combustion engines.

Traded in a variety of forms, lithium after it is mined sells as spodumene (containing close to 6% lithium metal).

Over the past three months the price of spodumene has been edging up from less than $700 a ton as concern grew about a crackdown by Chinese authorities on mines which have been producing above their license conditions.

But the 12% price surge yesterday to $925 a ton took investors by surprise, triggering a rush into lithium miners, potentially pushing them well ahead of the market for the metal.

UBS, an investment bank, said in a research note that leading Australian lithium companies were trading as if the metal price was between $1150-and-$1300/t.

Overpriced Miners

The bank has sell recommendations on both Pilbara and IGO with Pilbara tipped to fall from last sales of A$2.26 to A$1.60 and IGO to fall from A$5.37 to A$4.80.

“Recent events have highlighted that spodumene prices at less than $700/t are unsustainable and while we have more to learn about the China crackdown on mining licences the actual supply disruption could be more muted than equities might suggest,” UBS said.

Another investment bank, Citi, said it expected the Jianxiawo mine to remain closed for two-to-three months with lithium miners currently pricing in a spodumene price well above the market for the metal.

Macquarie Bank also warned that while the lithium market last year was driven by fundamental supply and demand it is currently being driven by macroeconomic sentiment fueled by anti-involution policies (a Chinese Government attempt to curb aggressive competition).

Quick Reversal

“Capital markets via futures contracts appear to be a greater driving force currently than industry supply and demand fundamentals,” Macquarie said.

“If the production suspension expectations are not met, sentiment could quickly reverse.”

Macquarie said that if the market reverts to pricing on supply and demand fundamentals lithium miners could quickly correct.

Disclosure... PLS held in SM but not in RL

Good article and summary @Scot1963, thanks for the posting.

I've been a long time holder IRL getting a largish quantity at ~$1/each and only recently hooked up with $PLS on SM as they started to gain some traction against the shorters. Obviously, the CATL mining suspension was a bonus and totally unexpected (at least by me), but I still like the management team and long-term prospect for $PLS, even though as you and others rightly pointed out, resource companies' SP is inextricably linked to the spot material price.

Whilst I agree with the overall sentiment of the various forecasters you identified, I'll ride the train for a little longer in my SM & IRL portfolios and hope their predictions don't come to fruition too soon!!