[SMM Analysis] Spot Lithium Carbonate Prices Rose Sharply on May 6, Q2 Price Trend Outlook

Today, the SMM spot price of battery-grade lithium carbonate rose significantly compared to the previous working day. Futures side, the lithium carbonate 2609 contract opened high at 191,500 yuan/mt today, briefly pulled back to 191,000 yuan/mt after opening before quickly rallying, stabilizing above the 193,000 yuan/mt level in the morning session. Around midday, bulls continued to increase open interest, driving prices to accelerate upward. The afternoon session fluctuated upward at highs, with prices pushing further to 199,600 yuan/mt near the close, ultimately settling at 199,400 yuan/mt, up 7.31%, with open interest increasing by 21,281 lots.

Spot market, upstream spot order quotes remained relatively firm, with the hold-prices-firm mentality further strengthened by the sharp price rally. Downstream material plants showed weak purchasing willingness, as monthly long-term agreement and customer-supplied materials were gradually delivered to warehouses at the beginning of the month, replenishing inventory, and spot order procurement demand further contracted. Market inquiries and actual transactions were sluggish, and spot prices struggled to catch up. Today's sharp price rise, in addition to continued supply-side disruptions further strengthening the tight supply expectations for Q2, may also be related to massive capital inflows into far-month contracts and sentiment-driven speculation around the 200,000 yuan/mt threshold.

Looking ahead, based on SMM's assessment of the full-year supply-demand fundamentals, the lithium carbonate market in 2026 is likely to face a shortage. Specifically, May–June is expected to see continued destocking. Demand side, price sensitivity showed notable divergence: when lithium carbonate prices exceed 200,000 yuan/mt, some energy storage projects in China may adopt a wait-and-see sentiment due to IRR being under pressure, but energy storage demand outside China remains generally positive, and ex-China projects have notably lower sensitivity to lithium battery prices than domestic ones, which to some extent broadens the upside room for prices. Supply side, uncertainties continue to accumulate. Although Zimbabwe lithium concentrates have shipping arrangements in place, the situation remains fluid and related risks have not been fully eliminated. Meanwhile, four mines in Jiangxi may enter a license renewal period. Although smelters currently have inventory buffers, if the license renewal extends into Q3 without production resumptions, the supply-side impact will further intensify. Inventory structure, current SMM lithium carbonate sample inventory stands at approximately 104,000 mt, with an inventory-to-sales ratio of around one month. Under the low inventory structure, if marginal supply-demand disruptions occur, market sentiment will be significantly amplified and price elasticity will increase. Overall, in the near term, lithium carbonate supply constraints have not yet been resolved, inventory remains at relatively low levels, and demand expectations are generally positive. Lithium carbonate prices are expected to maintain a relatively strong trend.