[SMM Analysis] Spot lithium carbonate prices drifted lower, with weekly production declining

Today, SMM battery-grade spot lithium carbonate prices drifted lower compared with the previous working day. The lithium carbonate 2701 contract opened lower today at 128,600 yuan/mt, briefly rebounded to 129,400 yuan/mt after the open, then came under sustained pressure from bears and drifted lower along the average price line. Around midday, the decline accelerated, with prices touching a low of 123,200 yuan/mt. In the afternoon, prices consolidated on a weak note at low levels, fluctuating repeatedly around 124,000 yuan/mt, and stabilized slightly near the close, ultimately settling down 4.79% at 124,400 yuan/mt, with open interest down 6,390 lots.

In the spot market, downstream dip-buying willingness remained intact, while upstream lithium chemical plants continued to hold spot orders back from selling and kept prices firm. Overall, the pace of market inquiries and actual transactions slowed down. This week, China's lithium carbonate production declined, mainly because some enterprises using spodumene saw raw material arrivals fall short of expectations and underwent maintenance, leading to lower production. Some enterprises using lepidolite reduced operating rates due to intensifying cost pressure. Production from other raw material sources remained stable. From the perspective of actual market transactions and inventory, upstream lithium chemical plants continued to deliver long-term contracts, and sentiment to hold spot orders back from selling and keep prices firm persisted. Some enterprises sold spot orders, so upstream lithium chemical plants showed a destocking trend this week. Downstream cathode material plants and battery cell manufacturers continued to buy the dip this week to stockpile ahead of the holiday, resulting in inventory accumulation. In the trader segment, as upstream shipments slowed and downstream buying continued, inventories were significantly drawn down.