What if a supply glut collapses lithium prices?
A flood of African/Chinese brine supply crushing lithium carbonate ~70% bankrupts marginal hard-rock (Australian spodumene, Albemarle) — the move is lithium equities and producers down, with copper/Freeport a weak negative read-through and the crypto leg noise. Rhymes with the 2023-24 lithium collapse from ~$80k to ~$10k/t CNY that gutted Pilbara and Liontown. Forward angle: oversupply is structural as Chinese lepidolite and African output ramp, so the floor is producer cash-cost capitulation, not demand — short the marginal miners, not the metal's long-run thesis.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a mixed shock. A wave of new African and Chinese brine supply crushes lithium carbonate prices seventy percent, bankrupting marginal hard-rock miners. The trigger decomposes into signed root‑shocks — Industrial demand ▼ · Risk appetite ▲ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | Freeport (copper) FCX 📈 chart | Equity | ▼ -0.7% hist -1.08–+0.07% · other way -0.63% (n=11) |
| 2 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▲ +0.3% hist -3.05–+1.44% · other way +4.67% (n=5) |
| 3 | Copper XCUon Hyperliquid 📈 chart | Commodity | ▼ -0.3% hist -0.24–+-0.0% · other way -4.02% (n=11) |
| 4 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▲ +0.3% model prior · unmeasured |
| 5 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▲ +0.3% hist -4.55–+12.9% · other way -2.01% (n=11) |
| 6 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▲ +0.2% hist -0.78–+2.23% · other way -2.25% (n=5) |
| 7 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▲ +0.2% hist -0.12–+0.19% · other way +0.64% (n=12) |
| 8 | Platinum XPTon Hyperliquid 📈 chart | Commodity | ▼ -0.2% hist -0.28–+0.31% · other way -1.73% (n=11) |
| 9 | Palladium XPDon Hyperliquid 📈 chart | Commodity | ▼ -0.2% hist -0.61–+0.14% · other way -2.49% (n=11) |
| 10 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +0.2% hist -1.25–+3.01% · other way +2.64% (n=7) |
| 11 | Tech sector XLK 📈 chart | Equity | ▲ +0.1% hist -0.03–+0.12% · other way +0.78% (n=11) |
Probable recommendation
Why we may diverge from history
Trust the cascade's XPD short over history: the +7.2% is PGM-bull regime contamination (platinum 11-yr high, Valterra demerger windows) — a lithium glut has no palladium channel, so realized history is regime-biased.
Historical precedent — what analogous events actually did
Across 40 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| High-yield credit HYG | SHORT | -0.6% · 5d -0.2% | 73% | 38 | 0.35 | · |
| 10y yield DGS10 | LONG | +14bp · 5d +6bp | 60% | 40 | 0.18 | · |
| MSTR MSTR | LONG | +11.8% · 5d -2.6% ↺ fades | 59% | 38 | 0.17 | ✓ matches cascade |
| XPD XPD | SHORT | -0.5% · 5d -1.1% | 59% | 38 | 0.15 | ✓ matches cascade |
| US dollar DXY | LONG | +0.2% · 5d +0.2% | 58% | 40 | 0.12 | · |
| ETH ETH | LONG | +2.0% · 5d -2.2% ↺ fades | 56% | 37 | 0.10 | ✓ matches cascade |
| FCX FCX | SHORT | -0.7% · 5d -2.1% | 56% | 38 | 0.09 | ✓ matches cascade |
| SOL SOL | SHORT | -3.1% · 5d -6.8% | 56% | 37 | 0.09 | ⚠ differs |
| NDX NDX | SHORT | -0.2% · 5d -1.0% | 56% | 39 | 0.08 | ⚠ differs |
| Bitcoin BTC | LONG | +2.8% · 5d -1.9% ↺ fades | 54% | 37 | 0.06 | ✓ matches cascade |
| XLK XLK | SHORT | -0.1% · 5d -0.9% | 54% | 38 | 0.05 | ⚠ differs |
| Volatility VIX | SHORT | -2.1% · 5d -4.2% | 53% | 39 | 0.05 | · |
| Gold XAU | SHORT | -0.2% · 5d -1.2% | 51% | 38 | 0.02 | · |
| XCU XCU | LONG | +0.1% · 5d -0.9% ↺ fades | 49% | 38 | 0.00 | ⚠ differs |
Why this probability
Lithium oversupplied with new brine/African tons; a steep 70% crash is plausible but extreme. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.