Good morning. Here are the key updates:
**Trump Threatens to Seize Venezuela’s Oil Assets** Former U.S. President Donald Trump has accused Venezuela of unlawfully stripping American companies of oil rights and demanded their return. Speaking at Andrews Air Force Base, Trump stated, "We will reclaim these rights. They were taken from us illegally." The remarks followed his announcement of a full blockade on sanctioned oil tankers entering Venezuelan waters.
**U.S. and Ecuador Launch Joint Anti-Drug Operation** The U.S. Southern Command reported a lethal strike on a vessel in international waters off the Eastern Pacific, identified as belonging to a "terrorist organization" involved in drug trafficking. Four alleged "narco-terrorists" were killed. No evidence of drug smuggling was provided. Separately, the U.S. Embassy in Ecuador revealed plans for a joint air force operation with Ecuador in Manta to combat drug-related threats. Ecuadorian President Daniel Noboa confirmed the collaboration, emphasizing its role in disrupting trafficking routes.
**U.S. Inflation Cools, Boosting Fed Rate-Cut Bets** Delayed data showed November’s CPI rose 2.7% YoY, below expectations, reinforcing disinflation trends. White House economist Kevin Hassett praised the figures, noting "high growth with low inflation" and suggesting the Fed has "significant room to cut rates." Futures now price in a 28.8% chance of a January rate cut, with traders expecting 62bps of easing in 2024.
**JPMorgan Raises Lithium Carbonate Price Forecast** Analysts led by Lyndon Fagan lifted their Q4 2026 lithium carbonate target to $18,000/ton (vs. current $13,500/ton) and spodumene (lithium ore) to $2,000/ton (from $1,100/ton), citing supply lagging behind surging demand. JPMorgan upgraded pure-play lithium miners to "overweight."
**Lithium Market Volatility Amid Supply-Demand Shifts** Lithium carbonate futures have surged 44% since October, driven by tight supply and restocking demand. However, uncertainties loom: - The potential restart of Jianxiawo mine and Jiangxi Qiangyu’s new production line could boost supply. - Weekly inventory drawdowns slowed to 1,044 tons (vs. ~2,000 tons previously), signaling weaker demand. - LiPF6 (battery material) prices dipped ¥2,500/ton to ¥170,500/ton, further hinting at softening demand.
Analysts warn of risks: - **CITIC Futures’ Zhang Weixin**: Prices already reflect optimistic 2026 demand; a mismatch with actual growth or supply surprises may trigger corrections. - **Everbright Futures’ Zhu Xi**: Mine restarts (e.g., Jianxiawo) and seasonal demand drops could reverse inventory trends. - **Chuangyuan Futures’ Yu Shuo**: Low mid-downstream inventories provide price support, but Q1 production schedules will be critical amid weak auto sales.
Traders are advised to monitor mine resumptions and demand realization while managing positions cautiously.
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