Weekly Review of the Lithium Carbonate Market: Spot Lithium Carbonate Prices Rise Sharply, Divergence Between Futures and Spot Prices Requires Attention [SMM Weekly Review]

Spot lithium carbonate prices showed a strong trend of "continuous one-sided rise" this week. The SMM average price of battery-grade lithium carbonate increased from 95,150 yuan/mt at the beginning of the week (December 15) to 97,550 yuan/mt on Thursday (December 18), a cumulative increase of 2,400 yuan/mt; the average price of industrial-grade lithium carbonate rose from 92,650 yuan/mt to 94,950 yuan/mt, a cumulative increase of 2,300 yuan/mt. The futures market performed even more strongly, with the price range for the most-traded contract shifting significantly higher in a sideways movement, breaking strongly from 97,300-101,200 yuan/mt at the start of the week to 104,700-109,900 yuan/mt. This round of price action was primarily driven by market sentiment, with the direct trigger being the announcement issued by the Yichun Natural Resources Bureau in Jiangxi regarding the revocation of 27 mining rights. Although this announcement sparked market concerns about lithium resource supply, it is important to note that the involved lithium-bearing porcelain clay ore mines (such as the Shiziling Mine) had actually ceased production before 2025 and were not continuously supplying lithium resources to the market. Therefore, this event has no substantive impact on the stability of current and subsequent lithium carbonate supply. The abnormal price increase mainly reflects fluctuations in sentiment and is weakly linked to industry fundamentals. From the perspective of actual market transactions, the current price level has clearly exceeded the acceptable range for most downstream material plants, resulting in very few market transactions, primarily supported by just-in-time procurement from some enterprises.

From a supply-demand perspective, supply-side lithium chemical plant production remained stable, and domestic lithium carbonate production in December was still expected to maintain approximately 3% MoM growth. Demand-side, the robust performance of the NEV and ESS markets continued to provide underlying support for demand, but battery cell and cathode material production schedules in December were expected to show a slight MoM decline. Overall, the industry maintained a pattern of "steady supply increase and demand holding steady at high levels," with the destocking trend expected to continue but at a slower pace.

It is noteworthy that the market exhibited significant "divergence between futures and spot prices" and emotional characteristics this week. The rapid price increase had severely suppressed spot transactions, while the futures market showed irrational gains, creating a certain divergence from spot fundamentals, calling for all parties to rationally assess the actual supply and demand situation.