In November, domestic lithium salt companies that reduced production or underwent maintenance in October are expected to gradually resume normal operating rates. Additionally, production of lepidolite mines who produce lithium salt under outsourcing contracts might increase slightly. These factors may jointly drive domestic lithium carbonate production, potentially retesting domestic lithium carbonate market demand. With Chile's lithium carbonate exports to China surging 84.48% to 16,791 mt in October, China's lithium carbonate import volume is expected to continue growing. Despite increasing lithium carbonate supply potentially challenging higher spot prices, lepidolite-derived lithium carbonate spot prices currently exceed their cost, and some contracted lepidolite mines' cost is around 130,000 yuan/mt. Therefore, under this cost support, lithium carbonate prices may not significantly fall in the future.
Recently, the 2401 lithium carbonate contract’s open interest rose to 110,000 lots, significantly outpacing spot market inventory. As the delivery date nears, and with spot prices still above futures, there may be substantial delivery pressure on the 2401 lithium carbonate contract’s open interest. Additionally, the small price difference between long-term contracts suggests limited near-term decrease. This might indicate that, accounting for time and risk premium, investors see minimal room for long-term contract price drops. If long-term contracts stabilize around 120,000 yuan/mt, and the 2401 lithium carbonate and 2407 contract price difference narrows to about 10,000 yuan/mt, arbitrage fund market entry wouldn't be surprising. Furthermore, the lithium salt contract manufacturing cost for some lepidolite mines is also around 125,000 to 130,000 yuan/mt, providing strong cost support. Given these factors, the 2401 lithium carbonate contract's short-term price downside may be relatively limited. Also, for market trading companies hedging to profit from fluctuating spot lithium carbonate sales prices, a significant fall is unlikely.
