KEY POINTS
- GFEX lithium carbonate futures staged a major turnaround on Wednesday
- Market participants believe the reversal was triggered by comments at COP28 about fossil fuels
- Technical analysis suggests lithium carbonate is at a critical juncture and perhaps the low is in
Just after the market closed yesterday, I broke the news on X of a stunning turnaround in China's Guangzhou Futures Exchange (“GFEX”) Lithium Carbonate Futures. The most traded July 2024 contract was trading at a 3.1% loss around 11:30 am local time, extending Tuesday’s heavy losses. But just before the close of the trading session, it performed a sudden about-face to close up 10.0%.
10% is the maximum the contract can trade from its previous settlement. Traders call Wednesday’s move a “limit-up” move. Due to recent volatility in its lithium carbonate futures contracts, GFEX increased their daily limit move from 7% to 10% last week,
and today they’ve increased it to 13%.
This is because limit moves have become commonplace on GFEX lithium carbonate lately. The benchmark July 2024 contract has closed
limit-down three times and limit-up three times in the last eight trading sessions. Given today’s limit has been increased to 13%, it could be a very interesting day for lithium fans indeed!
https://www.marketindex.com.au/news/lithium-price-stages-massive-reversal-on-cop28-chart-suggests-low-may-be-in