Spot lithium carbonate prices retreated after rapid rise and fluctuated at highs this week. Futures market volatility intensified, with the most-traded LC2609 contract price range oscillating from 196,600-205,000 yuan/mt at the beginning of the week to 195,000-209,900 yuan/mt. The price hit a mid-week high of 209,900 yuan/mt before pulling back to 202,000 yuan/mt. Open interest first increased then decreased, reflecting a fierce tug-of-war between longs and shorts.
Market transactions exhibited a pattern of "active on declines, sluggish at highs," with divergence between upstream and downstream intensifying. On the upstream lithium chemical plant side, there was still willingness to sell spot orders at relatively high levels, but as prices fluctuated downward, sentiment to hold prices firm and hold back from selling recovered, and willingness to sell spot orders weakened. Some enterprises registered their supplies as warrants and delivered them to futures for hedging. On the downstream material plant side, when prices pulled back below 200,000 yuan/mt, just-in-time procurement activities increased notably, and producers with low inventory took the opportunity to restock on dips. However, overall, downstream still showed clear resistance to prices above 200,000 yuan/mt. Large-scale stockpiling had yet to emerge, with most enterprises continuing a "just-in-time procurement" strategy. On the trader side, as downstream purchase at highs remained sluggish, inventory continued to accumulate, and purchase willingness was weak.
Looking ahead, spot lithium carbonate prices are expected to hover at highs in the short term. Supply side, the pace of Jiangxi lithium mine license renewal and production resumptions, as well as the actual implementation progress of Zimbabwe's export quotas, remain key variables. Demand side, close attention should be paid to whether downstream acceptance of prices above 200,000 yuan/mt can further improve, and the real response of energy storage end-users to current lithium prices. The market is currently in a critical verification phase of "price signal transmission to downstream." Only when futures and spot prices effectively penetrate into the actual procurement processes of battery cell manufacturers and system integrators can the true acceptance of current high prices by downstream be assessed. Lithium carbonate prices are expected to hover at highs in the near term.
