This week, spot lithium carbonate prices shot up before retreating, consolidating and trending lower overall. The futures market saw intensifying volatility, with the most-traded CO2701 contract price range swinging sharply from 161,500-162,500 yuan/mt early in the week down to 148,300-154,900 yuan/mt. After touching a mid-week high of 162,500 yuan/mt, it pulled back continuously, hitting a low of 148,300 yuan/mt. The weekly range was about 8.7%. Open interest declined then expanded amid a fierce tug-of-war between longs and shorts.
Market trading featured active selling after the shot up and buying on dips. Upstream lithium chemical plants, those not in maintenance showed significantly higher willingness to sell spot orders when prices surpassed recent highs; that willingness slowed near month-end as some prepared shipments for term contracts; plants under maintenance continued prioritizing term contract supply. Downstream material plants actively stocked up near month-end for next month's production – post-price settlement unwinding and just-in-time procurement willingness were strong below 150,000 yuan/mt, but there was little appetite to chase prices after the shot up. Overall, market inquiries and actual transactions remained relatively active.
Supply-side production recovered somewhat, with salt lake facilities resuming production after maintenance. China's lithium carbonate supply recovered this week, mainly due to some lithium chemical plants at salt lakes completing maintenance and gradually resuming production; other raw material sources maintained normal operations. In terms of inventory changes: upstream lithium chemical plants not in maintenance were encouraged by drifting higher prices to gradually increase willingness to sell spot orders; plants in maintenance periods continued mainly supplying under term contracts, with inventory steadily digested; downstream material plants persisted in just-in-time procurement on price dips, with some already stockpiling for September, but concerns over next month's price trend kept stockpiling relatively cautious; traders saw overall destocking dynamics alongside upstream spot shipments and downstream restocking demand.
This week’s price fluctuations were influenced by multiple factors. One, supply-side expectations wavered – early in the week, slower-than-expected progress in Jiangxi mine production resumptions drove prices sharply higher, but then better resumption expectations coupled with weaker macro sentiment led to a quick pullback. Two, month-end downstream stockpiling for next month’s production boosted spot order purchase willingness, providing phased support for prices. Three, a macro-level decline in systemic risk appetite weighed on lithium prices.
Looking ahead, short-term lithium carbonate prices may lean firm. On the supply side, salt lake maintenance completions and gradual resumptions bring marginal growth, but the pace of Jiangxi mine production resumptions remains the key variable. Demand side, downstream stocking demand for September supports prices, though the behavior is relatively cautious and lacks chasing momentum. Currently, spot discounts have narrowed significantly, and active downstream buying below 150,000 yuan/mt provides a floor for prices. Key areas to watch remain the actual pace of Jiangxi mine resumptions, changes in downstream September stocking rhythm, when warrants will be absorbed, and September production schedules.
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