Spot lithium carbonate prices stopped falling and rebounded this week, fluctuating upward. The futures market held up well, with the most-traded September 2026 contract oscillating upward from a price range of 160,300-165,800 yuan/mt at the start of the week to 164,800-175,000 yuan/mt, hitting a mid-week high of 175,000 yuan/mt. The weekly gain was approximately 5.5%, open interest increased significantly, and bullish funds intervened actively.
Market transactions showed a pattern of upstream holding prices firm and holding back from selling, while downstream purchased as needed, creating a clear misalignment in price expectations between buyers and sellers. Upstream lithium chemical plants maintained their stance of holding spot orders firm and holding back from selling, with some enterprises keeping their willingness to sell at prices above 170,000 yuan/mt. Downstream material plants held comparatively lower psychological procurement price levels, with most purchasing as needed; their willingness to purchase spot orders weakened as prices rose. Overall, market inquiries were relatively active, but actual transaction volumes remained stable due to the misalignment in price expectations between upstream and downstream.
Lithium carbonate production increased this week, mainly due to production lines at spodumene processing facilities that had been under maintenance earlier resuming production successively. The recycling sector and salt lake operations maintained stable production, while lepidolite operations saw minor output fluctuations due to raw material supply issues. From the standpoint of actual transactions and inventory, as prices continued to fluctuate downward, upstream lithium chemical plants were reluctant to sell spot orders; only a few enterprises that had previously hedged at high levels managed to complete small-volume spot transactions with downstream or traders, while most lithium chemical plants still focused on holding prices firm and holding back from selling. However, due to the concentrated delivery of long-term contract orders early in the month, combined with some resumed production lines not yet reaching full capacity, lithium chemical plant inventories experienced slight destocking this week. Downstream material plants saw inventory buildup this week, as early-month long-term contracts and customer-supplied materials arrived successively, along with dip-buying of spot orders. Traders, following downstream purchase-as-needed patterns, exhibited a destocking trend.
The price rise this week was mainly driven by the following factors: First, stronger import-side support. According to Chile customs data, Chile's total lithium carbonate exports in May were 19,100 mt, down 35.2% MoM, of which exports to China were 13,600 mt, a sharp decline of 40.8% MoM, marking the first significant pullback in the past six months. Lithium carbonate monthly imports are expected to decrease somewhat in June-July; coupled with continued high production schedules for downstream LFP materials in June, China's destocking speed is expected to accelerate. Second, news-driven disturbances. A fire occurred at the Greenbushes lithium mine's CGP3 plant; although CGP1 and CGP2 operations were unaffected and IGO did not revise its FY2026 production guidance, the extent of the damage to CGP3 and the repair timetable still require attention. A substantial delay in its production ramp-up could impact the pace of future supply growth. Third, the ongoing tug-of-war between longs and shorts persisted, with supply-side factors such as the drop in Chilean exports and Jiangxi mine permit renewals providing support for prices. However, headwinds such as high warrant pressure and expectations of Zimbabwean ore arrivals capped the upside, keeping the tug-of-war between longs and shorts ongoing. Looking ahead, short-term lithium carbonate prices are likely to hold up well.
