Market Views Split over Whether Recent Drop in Lithium Prices Signals the End of Upward Trend

As of December 19, the SMM spot quotations of battery-grade lithium carbonate were 541,000-563,000 yuan/mt, and the average price was 552,000 yuan/mt, which was 15,500 yuan/mt or 2.73% lower than the previous high of 567,500 yuan/mt. 

On December 14, Pilbara completed its 13th lithium concentrate auction with a transaction price of $7,505/mt FOB, down 3.84% from the auction price on November 16. 

Market opinions are divided regarding whether the price of lithium will fall or not in the future. 

The bullish players pointed out that the recent decline in lithium carbonate prices is "normal fluctuations with the entry of the off-season, rather than a turning point in the upward trend, and they expected that the high price of lithium carbonate will last for a long period of time. 

Bearish players understand that the demand may continue to weaken and oversupply is about to emerge. Ma Rui, a lithium and cobalt analyst at SMM, predicts that upstream lithium salt plants will still hold offers firm before the end of the year. However, considering factors such as the removal of NEV subsidies and the entry into the off-season of terminal consumption in the first quarter, the overall lithium carbonate price may show a slight downward trend. 

The report of Zheshang Securities on December 14 predicted that the lithium carbonate supply-demand balance in each quarter of next year would be -1,000 mt, 4,000 mt, 26,000 mt, and 47,000 mt of LCE respectively.