[SMM Weekly Review] Lithium carbonate market remains weak, with prices continuing to decline due to supply-demand imbalance and weakening costs

This week, the spot lithium carbonate market continued its weak trend from the previous period, with the price center continuing to decline. As of today, the SMM index price for battery-grade lithium carbonate was reported at 61,233 yuan/mt, with the spot price range for battery-grade lithium carbonate being 59,500 to 62,300 yuan/mt and an average price of 60,900 yuan/mt. The spot price range for industrial-grade lithium carbonate was 58,800 to 59,800 yuan/mt, with an average price of 59,300 yuan/mt. The cumulative decline in lithium carbonate prices this week has reached 1,500 yuan/mt.

The continuous decline in lithium carbonate prices is closely related to the significant drop in lithium ore prices, in addition to being influenced by the substantial supply surplus in the fundamental supply and demand situation. With the continuous weakening of cost support, lithium carbonate prices are being dragged down further. From the perspective of market transactions this week, trading activities have warmed up compared to last week, and the purchase willingness of downstream material plants has also improved compared to the first and second halves of this month. However, against the backdrop of a relatively high proportion of long-term agreement customer-supplied materials, the increase in purchases remains relatively limited.

On the supply side, the slight rebound in futures prices earlier provided opportunities for some non-integrated lithium chemical plants to hedge and resume production, with expectations of an increase in market supply. Meanwhile, with the continuous decline in lithium ore prices, the support from the cost side is gradually weakening, further suppressing lithium carbonate prices. Overall, against the backdrop of a supply surplus, the lithium carbonate market is expected to remain in the doldrums in the short term, with prices expected to continue to face downward pressure.