Lithium Prices Likely to Hit New Highs amid Supply Shortage Post the CNY Holiday

SHANGHAI, Jan 27 (SMM) - Intraday carbonate lithium prices recorded high ahead of the Chinese New Year holiday. The supply side was affected by the shutdown and maintenance of the upstream lithium salt manufacturers and the production reduction of the brine lake. The output in January is expected to be about 18,700 mt, a decrease of 5% from the previous month.

On the demand side, the rush to install NEV batteries and the substantial expansion of the lithium battery sector at the end of the year led to a significant increase in the demand for upstream lithium salts, with a raw material supply deficit of up to 28%, which in turn led to a jump in the market prices of lithium carbonate. It is expected that after the CNY holiday, the supply of lithium carbonate will rebound slightly as lithium salt manufacturers gradually resume work. The downstream 3C digital market has stabilised. In terms of power battery, with the continuous growth of the NEV market, the demand for NMC and LFP batteries and relative materials will rise further, sustaining the supply shortage of lithium carbonate.

It is estimated that the transaction prices may continue to rise approaching the 400,000 yuan/mt mark post the CNY holiday.