Lithium Carbonate Oversupply Pressure Lingers, Market Eyeing Whether Demand Could Pick Up In September (Traditional Peak Season)

SHANGHAI, Aug 31 (SMM) – In the afternoon of August 28, the most traded lithium carbonate futures contract fell significantly, dropping a staggering 7% at 183,450 yuan/ mt. At the close, most traded lithium carbonate futures contract fell by 5.86%. The 2402 contract fell by 6.15%. The 2403 contract fell by 5.65%. The 2404 contract fell by 5.1%. The 2405, 2406, and 2407 contracts fell by about 4%, and the 2408 contract had the smallest decline at 3.92%.

On 25th and 28th of August, domestic battery-grade lithium carbonate spot prices fell from to 210,000-230,000 yuan/mt, with an average price of 220,000 yuan/mt, and a decrease of 5,000 yuan/mt compared to August 24th.

According to SMM's research, the lithium carbonate spot market was sluggish recently. From the supply side, the overall supply is sufficient in the market. On the demand side, there is no significant increase in demand in the industry. With ample inventory on the supply side, the price of lithium carbonate has been adjusted downward.

According to SMM data, as of August 24th, the total weekly inventory of lithium carbonate was 69,073 mt in physical content. In terms of downstream market,SMM has learned that there is an expectation of demand recovery for September to October. The price of lithium carbonate may experience a significant rebound, similar to what happened in late April. On the supply side, under the circumstance that the price of lithium has been weakening in August, some unconfirmed news shows that African mines have reduced production and transferred ownership due to cost issues. It is difficult to predict the supply of lithium resources and by how much the cost support for lithium carbonate will weaken.