The average spot price will rise by another 5000 yuan! The misunderstanding behind the flash collapse of lithium carbonate "futures" is too big! [SMM Express]

SMM, Jan. 13: yesterday, a piece of news about the "collective flash collapse of lithium carbonate prices" was widely spread. It is reported that recently, several mainstream quotation platforms show that the spot price of lithium carbonate continues to rise and repeatedly break through three-year record highs, but the website of Wuxi stainless Steel Electronic Trading Center shows that the forward order price contract prices of many types of lithium carbonate have all dropped by more than 11.71%, and the lithium price index has dropped by 11.77%. This is the second day in a row that the site's lithium price index has plummeted, having fallen more than 10.5% in the previous trading day.

It is precisely because the price of lithium carbonate and lithium price index of the website is completely different from that of the spot market, which has attracted the attention of countless people in the industry. But in fact, behind this massive "flash crash", there is no small misunderstanding.

It is reported that Wuxi stainless steel net is actually not the domestic futures exchange that many people think, but belongs to the spot forward trading platform. At present, there are only five futures exchanges in China, namely, Shanghai Futures Exchange, large Commercial Exchange, Zheng Shang Exchange, CICC and Guangzhou Futures Exchange. Compared with the "orthodox" futures in these exchanges, the lithium carbonate contract of Wuxi stainless steel electronic disk is actually more likely to be a forward trading contract derived from the spot market rather than futures in the traditional sense.

Therefore, the decline in the price of lithium carbonate on Wuxi stainless steel net platform is actually more due to the strong short-term selling power in its own market, which is a "technical" decline with little correlation with the fundamentals of the industry.

And often in a relatively closed market, as long as the seller's power is greater than the buyer's power, commodity prices will fall. This is the case with Wuxi electronic disk. It is understood that in the afternoon of January 12, the number of lithium carbonate 2204 contracts sold in Wuxi stainless steel net once exceeded 14100, but the number bought was 0. It is not surprising, then, that its contract prices have fallen in tandem.

In addition, the media believe that from January 12, the domestic lithium carbonate industry was not affected by the decline in Wuxi electronic disk prices, the price effectiveness of Wuxi stainless steel mesh platform is open to question.

SMM as the domestic mainstream third-party quotation platform, SMM quotation is also favored by a large number of industry insiders. According to the spot price of SMM, on January 12, the average spot price of domestic battery-grade lithium carbonate continued to maintain its previous rising trend, with an average daily price increase of 3000 yuan / ton to 316000 yuan / ton.

"Click to view the spot market of SMM new energy products.

Today, the price of lithium carbonate is still "rising" constantly, once again, the daily price increase of 5000 yuan / ton easily broke through the 320000 yuan / ton barrier to 321000 yuan / ton, an increase of 15.47 percent this year.

Lithium hydroxide, which has been "going hand in hand" with lithium carbonate since the beginning of this year, also rose again by 5000 yuan / ton to 263500 yuan / ton today, an increase of 18.43% this year.

For the future price trend of lithium carbonate, SMM believes that due to the shortage of lithium carbonate raw materials, some downstream manufacturers may even passively reduce production at the end of January. After the Spring Festival, due to the poor stock preparation of enterprises in February and March, it is expected that lithium salt will not be as stable or falling as in previous years, and the price of lithium salt will continue to rise in the future.

Generally speaking, this "misunderstanding" is mainly caused by the lack of in-depth understanding of the website of Wuxi stainless steel electronic trading center. It is reported that the lithium carbonate contracts launched by Wuxi stainless Steel Electronics on July 5, 2021 currently have lithium carbonate contracts that expire in February, April and June in 2022, as well as lithium price indices that track the prices of each contract. However, due to the unfamiliarity of some people with the futures market, there have been cases in which sellers' institutions and researchers regard it as lithium carbonate futures when they release the research report.

But in fact, at present, there is no traditional futures related to lithium salt in China. On November 18, 2021, the Guangzhou Futures Exchange mentioned that in the product planning for the next two years, it may launch related varieties of services such as industrial silicon and lithium futures for green development. At present, the Guangzhou Futures Institute has launched a feasibility study on the listing of lithium futures, but the specific listed varieties are not yet known. Considering the higher market share of lithium iron phosphate in China, perhaps lithium carbonate futures are more likely to be listed.

However, there is no doubt that the lithium carbonate forward contract launched by Wuxi stainless steel electronic disk has made up for the lack of lithium futures in the current market to some extent, which is also the reason for the widespread concern about its price changes.