Weekly Review of the Lithium Carbonate Market: 6.22-6.25 Spot Lithium Carbonate Price Continued to Fluctuate Downward [SMM Weekly Review]

Spot lithium carbonate prices extended their downward trajectory this week, with the price center shifting further lower. The futures market saw intensifying volatility, with the most-traded LC2609 contract fluctuating downward from 150,900-161,800 yuan/mt early in the week to 150,300-163,900 yuan/mt, hitting a mid-week high of 163,900 yuan/mt before pulling back sharply and dipping to a low of 150,300 yuan/mt, testing the 150,000 yuan/mt psychological level. Open interest increased overall amid a fierce tug-of-war between longs and shorts.

Market transactions showed active dip-buying on the downstream side while upstream players held firm on prices and held back from selling. On the upstream lithium chemical plant side, spot order quotes remained high as they maintained a stance of holding prices firm and holding back from selling, with some enterprises showing limited willingness to sell below 170,000 yuan/mt. On the downstream material plant side sentiment around buying and stockpiling near the 150,000 yuan/mt level was active, continuing a dip-buying strategy, with some closing out their post-settlement price positions around 150,000 yuan/mt. Overall, market inquiries and actual transactions were relatively active, with downstream purchase willingness notably strengthening as prices fell.

Supply-side production edged up, while industry chain inventory diverged significantly. Lithium carbonate production edged up this week, mainly driven by incremental release from new capacity ramp-up on the spodumene side, while production from other raw material sources remained relatively stable overall. Looking at inventory changes: upstream lithium chemical plants, against the backdrop of a downward shift in the price center, continued to hold firm on spot order quotes and hold back from selling, leaving inventory basically stable; downstream material plants maintained a dip-buying strategy, with enthusiasm for buying and stockpiling notably increasing this week, leading to some inventory accumulation; traders synchronized destocking in line with the downstream buying pace. Overall, inventory adjustments diverged across segments, and market trading sentiment warmed somewhat.

Import and export data showed continued ample supply from outside China. According to customs data, China imported 37,555 mt of lithium carbonate in May, up 15% MoM and up 78% YoY. Cumulative imports for January-May reached 153,000 mt, up 53% YoY. Of this, 24,522 mt came from Chile (65%) and 11,422 mt from Argentina (30%). Lithium sulfate imports in May totaled 12,107 mt, down 33% MoM but up 53% YoY, with cumulative imports for January-May reaching 71,000 mt, up 105% YoY. Import data stayed high, supplementing domestic supply.

Looking ahead, on the supply side, the arrival pace of ore from Zimbabwe and the progress of Jiangxi mining license renewals remain key variables; on the demand side, active downstream buying and stockpiling sentiment near the 150,000 yuan/mt level provides some price support. In the short term, lithium carbonate prices are expected to remain in the doldrums, but whether the support near 150,000 yuan/mt holds requires monitoring.