Author: fortraders

Lithium, a key component in electric vehicle batteries, has seen a dramatic reversal in fortunes this year. Chinese spot lithium carbonate prices rose tenfold over the past two years, only to slump by 70% between November and April. This was due to a temporary demand hit in China’s EV market, the world’s largest, which caused a collective destocking cycle and killed the spot market. Prices for lithium carbonate outside of China have fallen this year, but not to the same degree, while hydroxide prices have been even more resilient.

The Chinese spot lithium carbonate market is a small and volatile component of the global lithium pricing structure, and price signals can be extreme relative to what is happening elsewhere in the supply chain. The big volumes traded directly between lithium producers and consumers are based on longer-term contracts, often with fixed-price components, insulating them from spot market volatility.

The Chinese spot price is already bouncing back hard, and the Wuxi futures exchange is playing an important role in the fast-growing industry’s price discovery process. The lithium industry has resisted any move towards futures trading on the basis that the product is not a commodity, but a successful Western futures reference price would act as an important counter-balance to the Wuxi price.

The lithium market is now on the rebound, led once again by the Chinese spot price. China’s EV market is regaining lost momentum and the domestic destocking cycle is coming to an end. It may be time for the industry to accept more price transparency, rather than have a small group of traders shove the global supply chain around.

Investors were busy in premarket trading on Friday, May 19th, as stocks reacted to a range of news. Foot Locker (NYSE:FL) stock slumped 25% after the footwear retailer reported weaker-than-expected results for its first quarter, and cut its full-year guidance. Deere & Company (NYSE:DE) stock rose 3.4% after the agricultural machinery manufacturer reported strong second quarter numbers and raised its 2023 net income forecast. Walt Disney (NYSE:DIS) stock fell 0.8% after the entertainment giant scrapped plans to build a nearly $1 billion corporate campus in central Florida. Ross Stores (NASDAQ:ROST) stock fell 0.7% after the discount retailer forecast second quarter profit below expectations. Applied Materials (NASDAQ:AMAT) stock fell 1.6% after KeyBanc said it doesn’t have much room to rise after a strong run. Catalent (NYSE:CTLT) stock fell 5.3% after the pharma company delayed its third quarter results and received a notice from the NYSE of noncompliance with listing standards. Lastly, Alibaba (NYSE:BABA) ADRs fell 1.2% after the Chinese e-commerce giant posted disappointing quarterly earnings due to sluggish consumer spending in its home country.

North American pilots are pushing for better pay and working conditions during their talks over new employment contracts with company managements. Members at some unions have voted to authorize a strike if a new contract isn’t reached.

American Airlines Group Inc, Southwest Airlines Co, Delta Air Lines, Air Canada, WestJet Airlines, United Airlines Holdings Inc, Spirit Airlines Inc, JetBlue Airways Corp and FedEx Corp are among the companies currently in negotiations with their pilots.

The Allied Pilots Association, Air Line Pilots Association and Air Canada Pilots Association have all reported overwhelming support for strike mandates from their members. The unions are pushing for “historic” workplace gains and full bargaining with the carriers.

The new contracts offer a range of benefits, including wage increases, reduced health insurance premiums, improved holiday pay, vacation, company contributions to 401(k) and work rules.

The negotiations come at a time of pilot shortages and a rise in public support for unions. While the chances of an actual labor disruption remain slim, the unions are making sure their members’ voices are heard.

Hitachi Astemo, a joint venture between Hitachi Ltd and Honda Motor Co Ltd, has revealed misconduct in testing and other procedures for components that lasted as long as four decades. The company found that employees had wrongly handled test and other procedures at 11 domestic and four overseas plants, affecting 22 products for 69 customers. The misconduct included reporting periodic test results to customers without running the actual tests and running tests on suspension systems at incorrect temperatures. Hitachi Astemo has worked with customers to redo tests on nearly two dozen affected products and taken measures to improve the robustness of their system. None of the customers involved were paid compensation and all of the costs associated with renewed testing were booked in the previous financial year.

India’s foreign exchange reserves rose for the third consecutive week, reaching their highest level since early June. According to the Reserve Bank of India’s statistical supplement, reserves stood at $599.53 billion for the week ended May 12, an increase of $3.55 billion from the previous week. This is attributed to the RBI’s intervention in the spot and forwards markets to prevent runaway moves in the rupee.

Despite the bullish outlook on the rupee from several foreign banks, the RBI’s intervention has caused the rupee to fall by 0.4% and 0.6% this week, its worst fall in two months. The local unit ended at 82.66 against the dollar on Friday.

The RBI’s intervention has been successful in shoring up reserves, however, it remains to be seen if the rupee will continue to remain strong in the coming weeks.