Will Lithium Carbonate Prices Continue to Fall? Here's a Silver Lining

In the absence of significant improvement in demand, supply has continued to grow. This is the main reason for the rapid decline in prices.

1. The main reason attributable to the current poor demand is that the production of new energy vehicle companies surged in the fourth quarter of last year, and the price cuts of fuel-powered vehicles will constrain the growth of new energy vehicles to a certain extent in the short term. Despite a growth in the overall sales, NEV inventories accumulated from January to February.

2. After the price of lithium carbonate fell, delivery taking of battery by automakers will slow down to varying degrees. Delivery taking and purchases of CAM by battery factories as well as those of lithium salt by CAM plants will be deferred to reduce safe inventories. The market pessimism has magnified the decline in current demand in all links.

3. The silver lining is that the demand for the new energy vehicle industry typically improves significantly in the third and fourth quarter. Energy storage demand is expected to maintain a relatively high growth rate. Therefore, in anticipation of lithium carbonate stabilising due to cost support, the demand should gradually pick up. And the delivery taking of batteries by end-users will also gradually resume.

Strong Reversal of Lithium Hydroxide Supply and Demand Structure is in Store