Weekly Review of the Lithium Carbonate Market: Spot Prices Rise Steadily as the Market Enters a Phase of Significant Destocking [SMM Weekly Review]

This week, the lithium carbonate market exhibited a pattern of steadily rising spot prices and sideways movement in futures. Strong downstream demand supported continued significant destocking, creating expectations of a temporary supply tightness.

Price-wise, spot prices continued to climb this week. As of October 23, the SMM battery-grade lithium carbonate index price rose from 73,991 yuan/mt at the beginning of the week to 74,821 yuan/mt, a cumulative increase of 830 yuan/mt. Battery-grade lithium carbonate was priced at 74,000-75,600 yuan/mt, with an average price of 74,800 yuan/mt, up 800 yuan/mt WoW from Monday; industrial-grade lithium carbonate was priced at 71,950-73,150 yuan/mt, with an average price of 72,550 yuan/mt, also up 800 yuan/mt WoW from Monday.

In terms of supply, the operating rate at lithium chemical plants remained high. New production lines were commissioned for both spodumene and salt lake sources, and total lithium carbonate production in October is expected to maintain growth potential, with market supply steadily increasing.

On the demand side, the main downstream sectors continued to show strong performance, serving as the core driver supporting this week's price increase. The power battery sector benefited from rapid growth in both commercial and passenger NEV markets; the ESS market maintained a robust situation with strong supply and demand. Currently, the operating rate at downstream material plants continues to rise, and their procurement demand has supported spot transactions.

Looking ahead, although lithium carbonate supply in October is expected to grow steadily, resilient strong demand from the EV and ESS sectors is anticipated to push the market into a significant destocking phase, leading to a temporary supply tightness. Overall, the destocking expectation underpinned by demand is expected to provide solid support for the price floor, and lithium carbonate prices are likely to hold up well in the short term.