Will Lithium Prices Maintain Momentum following Recent Drastic Surge?

SHANGHAI, Nov 15 (SMM) - The prices of lithium carbonate have been booming drastically recently as a result of the expected cancellation of new energy subsidies next year, which has pushed the terminal players to frenziedly ramp up the production in the fourth quarter. And the production rush in the material sector comes two months ahead of the terminal sector considering the demand transmission cycle. Today we will talk about the latest price trend of lithium carbonate and see what substantial changes are happening in the market!

Recently, the production scheduling of LFP and ternary cathode material factories has been rising along with the gradual release of their production capacity and the production rush in the fourth quarter. As such, lithium carbonate prices rose drastically especially when the demand was growing quickly.

However, the price hike has slowed down recently. First of all, the arrivals of imported South American lithium carbonate have filled up the supply void in the market to some extent. In addition, the downstream purchase pace slows as well after the recent production rush has peaked. And lithium carbonate prices are even likely to pivot in the near future.

The slump in lithium carbonate prices on the trading platform on November 14 could be taken as an advanced feedback from the market. Taken together, the demand for lithium carbonate is unlikely to be that high during the rest of 2022, as the price surge last month is already a strong reflection of the production rush in the new energy sector in the fourth quarter before relative subsidies are cancelled in 2023.

In detail, the demand for ternary cathode materials is likely to post a MoM decline in the following two months based on the disclosed production scheduling of power battery and material factories. The cathode active material factories will focusing on the digestion of in-plant stocks. The market is currently bearish on lithium carbonate prices, and the supply and demand balance is likely to be reversed soon.