Australia’s beaten-down lithium sector has burst back to life this month amid signs that a lingering glut of the battery material is finally starting to ease, triggering a rush of trading activity.

Mineral Resources and Pilbara Minerals – among the most targeted by short sellers on the ASX – have rebounded more than 50 per cent since June. The rally was turbocharged by news last week that Chinese producer Zangge Mining was forced to halt production at its Qarhan project after regulators found its mining licence was invalid.