Weekly Review of the Lithium Carbonate Market: Spot Lithium Carbonate Fluctuated Upward on 3.23-3.26 [SMM Weekly Review]

This week, spot lithium carbonate prices first fell and then rose, showing an overall fluctuate upward trend. SMM battery-grade lithium carbonate prices fluctuated and rebounded, with industrial-grade lithium carbonate moving in tandem. Volatility intensified in the futures market, with the price range of the most-traded contract fluctuating upward from 140,000-149,500 yuan/mt at the beginning of the week to 155,000-162,300 yuan/mt, hitting a high of 162,300 yuan/mt on Thursday (26th). However, open interest continued to decline, indicating reduced capital participation.

Market transactions remained sluggish this week, while the divergence in psychological price levels between upstream and downstream players widened. Upstream lithium chemical plants maintained a strategy of holding prices firm, with overall weak willingness to sell spot orders, and indicative offers generally above 160,000 yuan/mt. Downstream material plants remained cautious and on the sidelines, with relatively sluggish purchase willingness and psychological purchase price levels mostly below 150,000 yuan/mt. Some enterprises maintained production by increasing the proportion of long-term contracts or customer-supplied materials. The price spread between buyers and sellers widened, market bargaining intensified, and actual transactions were limited.

This week’s price rise was mainly driven by two factors: first, news related to Zimbabwe ore triggered market concerns over raw material supply outside China, creating expectations of tighter supply; second, February NEV export data exceeded expectations, boosting market sentiment. At the same time, escalating tensions in the Middle East weighed on risk appetite, and uncertainty remained at the macro level, placing some constraints on prices. On the capital side, positions continued to be reduced. Futures open interest extended its declining trend this week, with reductions of varying degrees on each trading day, indicating that market sentiment turned more cautious and some funds chose to exit and wait on the sidelines. Looking ahead, the market is expected to maintain wide swings in the short term. Supply side, attention is still needed on the recovery of shipments from Zimbabwe mines; demand side, the intensive launch of new car models from March to April is expected to drive marginal improvement in demand. Lithium carbonate prices are expected to maintain wide swings in the short term.