Lithium slide threatens PLS, LTR and MIN with third bear market in a decade

what happened

According to MarketIndex, lithium has entered a steep downturn after the 2025–26 recovery gave back more than half its gains in just five months. The benchmark lithium carbonate contract on the Guangzhou Futures Exchange (GFEX) settled at RMB94,180 per tonne, 55% under its 13 May peak of RMB210,580. Australian spot spodumene concentrate (SC6) trades at US$1,540 a tonne, 48% below its US$2,945 high.

The sell-off accelerated after reports that CATL, the world's largest battery maker, would trim its October output, though the publication argues the downtrend began earlier as doubts grew over 2026 demand. Battery energy storage systems, which drove much of this year's demand, now face uncertainty from Beijing's freeze on new battery capacity approvals and the expiry of China's export VAT rebate at year-end. Supply is also returning: Mineral Resources (MIN) is bringing Bald Hill back online, Core Lithium (CXO) is restarting Finniss, and Canaccord forecasts mine supply growth of about 1.35Mt LCE to 2030.

According to the author, the correlation between the GFEX lithium carbonate contract and PLS daily closing prices over the last 18 months is 0.95.

why it matters

For lithium miners such as PLS, LTR and MIN, lower carbonate and spodumene prices feed directly into margins, and the strong correlation with GFEX means futures moves tend to pass quickly into share prices. Macquarie notes that GFEX is approaching the upper end of its cost curve near RMB105,000/t, with the next support seen at about RMB80,000/t.

market impact

Lithium miners PLS, LTR, MIN: lower carbonate and spodumene prices squeeze margins and weigh on shares

tags

instruments