Weekly Market Review of Lithium Carbonate: Lithium Carbonate Prices Decline [SMM Analysis]

Spot lithium carbonate prices showed a fluctuating trend of rising first and then falling this week. The average SMM battery-grade lithium carbonate price dropped from 94,350 yuan/mt at the beginning of the week (December 1) to 94,000 yuan/mt on Thursday (December 4), while the average industrial-grade lithium carbonate price fell from 91,900 yuan/mt to 91,550 yuan/mt over the same period. The fluctuation range of the most-traded futures contract gradually shifted downward, narrowing from 95,800-98,500 yuan/mt at the start of the week to 91,600-94,600 yuan/mt on Thursday, with a closing price of 93,700 yuan/mt on Thursday.

In terms of market transactions, downstream material plants generally adopted a cautious wait-and-see attitude at the beginning of the week. Long-term contract orders and customer supply channels supported normal production at the start of the month, while spot order procurement remained primarily driven by rigid demand. As prices fluctuated downward, market inquiries and transaction activities became more active.

Supply side, lithium chemical plants maintained stable production growth. With the gradual commissioning of some new production lines, domestic lithium carbonate production in December is expected to increase by about 3% MoM, indicating a steady release of supply. Demand side overall maintained strong resilience. NEV sales in December are expected to perform impressively, and the ESS market continued its pattern of robust supply and demand, providing underlying support for demand.

Looking ahead, battery cell and cathode material production schedules are expected to remain high in December, though with a slight decline MoM. Against the backdrop of increasing supply and generally stable demand, the lithium carbonate market is expected to continue destocking in December, but the destocking pace is likely to slow down compared to November.