[SMM Analysis] November LCO Price and Supply-Demand Analysis

Price side, the average price of LCO (4.4V) in November was 140,500 yuan/mt, down 3.4% MoM and 37% YoY. Raw material side, the price of battery-grade lithium carbonate rebounded in November, while the price of Co3O4 continued to decline, leading to significant fluctuations in raw material prices. Nevertheless, due to the strong desire to bargain down prices from downstream battery cell manufacturers, the actual transaction prices of LCO in the market did not show significant changes and continued to fluctuate downward.

Supply side, LCO production in November increased by 4% MoM, mainly to meet rigid demand. The operating rate of top-tier enterprises remained high, with stable production plans and high market concentration. Demand side, due to the limited release of new digital 3C products at year-end, downstream enterprises were cautious in their procurement activities and had weak stockpiling intentions, maintaining only necessary safety inventory. Therefore, LCO production is expected to slightly decrease in December, and prices will continue to fluctuate downward.