Pilbara Minerals Limited

ASX:PLS

Pilbara Minerals Limited

ASX:PLS
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$2.61 (-6.8%)
Last close price
#126
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13
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Forum Topics PLS PLS Short Interest - Why?
NewbieHK
Added one year ago

I am guessing it’s simply following the normal cycle of a commodity. How many times have we seen this with coal and iron ore. Li prices are retreating at the moment. Interestingly, one would think this has to eventually turn. For all the new mines and explorers continuing to come on board there has been little meaningful increase to the actual production. PLS continues to build out and make a tonne of cash. In the short term some offset in price will come about through increase in overall production whilst, moving forward they will be rewarded as prices cycle upwards. This reminds me very much of the similar scenario over the last decade with FMG.

11
Rapstar
Added one year ago

Pilbara Minerals is now one of the most shorted stocks on he ASX. Does anyone have any idea what the short thesis may be?



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west
Added one year ago

not a thesis but my take on this would a mix of the following:

  • decline in price of lithium ... in short term (3-6months)
  • PLS is a pure play so leveraged to above
  • macro sentiment in general related to interest rates
  • high retail investor interest - jumping on the lithium train (that's already run...)
  • higher labour costs
  • high expectations priced in... if they have a production hiccup


there was another SM post about an AFR article that explained how BHP has no interest in lithium, I think this carries a bit of weight given their transition to future facing commodities, Given their ability to be a low cost producer, the fact that they haven't publicly taken any interest or taken on big M&A cast just enough doubt.

Just my opinion (BHP will come out with mega acquisition next week for sure :)

13
edgescape
Added one year ago

Most likely they are using the Lithium prices on the Guangzhou futures market which has been in steady decline

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But I think PLS don't follow the above as they already have negotiated prices for different concentrate.

So using above pricing could be deceptive. Plus I think the futures market is deliberately there to mislead.


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edgescape
Added one year ago

To clarify my statement on the Guongzhou futures lithium market, I don't think many participants would trade here as I think most companies already have negotiated offtakes and contracts with other customers depending on their "product" as opposed to commdity. Therefore prices will fall as it is an illiquid market.

This is why it's a bit misleading to use the prices and why I think it was done as a deliberate measure to cool the lithium market. But that is just my opinion from listening to other sources so don't quote me on it!

Having said that any short using that as a basis should do some research.

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