Recently, the lithium carbonate market has weakened, with a significant monthly decline. As of September 20th, the benchmark price of battery grade lithium carbonate was 130000 yuan/ton, a decrease of 16.7% from 156000 yuan/ton at the beginning of the month. This round of price decline is not caused by a single factor, but rather the result of the resonance of multiple negative factors such as changes in inventory data, differentiation of supply and demand expectations, fine-tuning of terminal demand, and tightening macro environment.
Inventory data adjustment
After the recent update of industry inventory statistics samples, the overall inventory scale of the market has significantly increased. The newly added inventory has effectively eased the tight spot market pattern in the early stage, completely breaking the low inventory support logic that the market relied on before. The market’s optimistic expectations for the long-term demand for lithium carbonate have rapidly cooled down, driving down prices.
The tightening of macro financial environment
As a core energy metal, the price trend of lithium carbonate is highly linked to macro liquidity. The expectation of tightening overseas monetary policy is heating up, and the probability of the Federal Reserve raising interest rates continues to rise, suppressing the overall valuation of base metals. Against the backdrop of global liquidity tightening, new energy metals including lithium carbonate are generally under pressure, and external macro negative factors and negative factors in the industry are forming a combined effect, driving prices to continue to decline.
Double increase in supply and demand
On the supply side, the increase in overseas lithium ore imports continues to be released, and lithium ore sources from Zimbabwe and other places are gradually arriving at the port. Coupled with the steady release of production capacity by domestic lithium salt enterprises and the resumption of work and production on pre maintenance production lines, the overall supply capacity of the industry continues to improve. Data shows that domestic lithium carbonate production achieved both month on month and year-on-year growth in August, and the trend of loose supply side in the industry is gradually emerging.
The demand side exhibits strong short-term resilience, forming a clear contrast with weak futures sentiment. In August, the domestic demand for lithium carbonate consumption maintained high-speed growth, achieving significant increases both month on month and year-on-year. Entering September, the traditional peak season effect of the power battery industry continues to emerge, and battery companies maintain a steady growth rate in overall production, with sufficient efforts to meet the demand for lithium carbonate. In the segmented fields, the production capacity of the lithium iron phosphate industry chain continues to climb, the operating rate is steadily increasing, and the output continues to grow, effectively offsetting the negative impact of the decline in production of ternary cathode materials. The overall market spot consumption has not shown significant weakness.
Looking ahead to the future, the lithium carbonate market will still be in a continuous game between real fundamentals and long-term expectations. In the short term, after adjusting inventory samples, the shortage pattern of spot goods has eased, coupled with the suppression effect of high market warehouse receipts on recent contracts, and prices are likely to continue a weak and volatile trend. However, from the perspective of core fundamentals, the core logic of the market’s “strong reality” has not been overturned, and the trend of continuous destocking in the industry is expected to continue until the end of the year, with stable support for essential needs.
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