Short selling: Almost 20% of Pilbara Minerals shares are held by short sellers

Welcome back to the Short Seller Series, where we delve into the most heavily shorted stocks on the ASX and highlight those with significant changes over the past week.

Short selling data is four days behind today's date because reporting is not mandatory until three business days after the trade. The tables below compares short interest changes between 25 October and 9 November.

Most shorted stocks

Different week, same shorts: A relatively incremental week for the top ten most shorted stocks. The market remains bearish on a few key themes including lithium, graphite and travel.

Shorts in Pilbara Minerals continues to inch higher towards 20%. The persistent rise in short interest coincides with a few headlines:

• Reuters warned that "Europe's electric car sales appear t be entering a go-slow zone as drivers await for better, cheaper models that are two-to-three years down the road.

• Tesla announced last month plans to slow its production ramp up.

• General Motors last month revealed plans to delay the production of its EV pickup trucks, with the need to also 'moderate' due to a recent slowdown in consumer demand for EVs.

• AFR notes the lack of options to short lithium, making PLS the most liquid and pure play form of exposure: “There appears to be a component of the market that wants to short lithium pricing and given that there’s no available mechanism to do that, they have gravitated, it would appear, to Pilbara as a proxy for the lithium market because of our scale, pure play exposure and our liquidity,” said Chief Executive Dale Henderson.

Will we one day see a major turnaround for lithium markets and an almighty squeeze for Pilbara Minerals?

Where are shorts being covered

Develop Global acquired Essential Metals last week – A $135m market cap explorer with a particular focus on the lithium-rich pegmatites of the Pilbara region.

Champion Iron is squeezing out any leftover shorts after an almost 30% rally since late October. Over the same time period, Singapore iron ore futures have rallied around 15% to a near 17-month high of US$130 a tonne.

Stocks with rising short interest

No major week-on-week changes. Short interest continues to funnel towards lithium, graphite and copper-related plays.