Lithium Carbonate Market Weekly Review: 6.29-7.2 Spot Lithium Carbonate Prices Showed a Bottoming-Out and Consolidating Upward Trend [SMM Weekly Review]

This week, spot lithium carbonate prices bottomed out and consolidated higher. The futures market was strong, with the most-traded 2609 contract rebounding sharply from 145,300-154,700 yuan/mt at the start of the week to 162,200-167,800 yuan/mt. The mid-week high touched 167,800 yuan/mt, and the weekly gain was about 8.4%.

Market sentiment diverged significantly between upstream and downstream players. Upstream lithium chemical plants continued to hold prices firm and hold back from selling, with low willingness to sell below 170,000 yuan/mt. Some enterprises, supported by costs, maintained the intention to keep prices high. Downstream material plants had largely completed their month-end stockpiling for the next month. As prices consolidated higher, purchases were mainly need-based, restocking was cautious, and acceptance of high-priced cargoes remained low. Overall, market inquiries and actual transactions were relatively stable and quiet, with the spot-futures price spread strengthening slightly.

Supply-side output fell sharply, strengthening expectations of supply contraction. Lithium carbonate production fell sharply this week, mainly because the circulation of spodumene and lepidolite raw materials in the market was relatively tight, while some lithium chemical plants had maintenance plans, leading to a sharp drop in spodumene-based output. Salt lake-based and recycling-based output maintained steady gains. Multiple bullish factors on the supply side converged to drive the price rebound. First, raw material supply tightened, with spot circulation of spodumene concentrates tightening, coupled with maintenance plans at some lithium chemical plants, strengthening expectations of near-term supply contraction. Second, signs of a phased decline in imports emerged: Chile’s lithium carbonate exports to China fell 40.8% MoM in May, and domestic import arrivals are expected to decline subsequently. On the demand side, downstream production schedules in July showed significant growth and remained high. The domestic lithium carbonate supply-demand balance is expected to show a large destocking pattern in July.

Looking ahead, near-term lithium carbonate prices may hold up well and consolidate, but upside room should be viewed with caution. Near-term lithium prices are expected to consolidate in the 160,000-170,000 yuan/mt range. It is recommended to focus on the progress of mine license renewal in Jiangxi, the pace of port arrivals of lithium ore from Zimbabwe, changes in downstream acceptance of high prices, and the extent of warrant retreat from high levels.