Lithium Carbonate Market Weekly Review: Jul 20-23 Spot Lithium Carbonate Prices Moved Sideways in a Narrow Range [SMM Weekly Review]

This week, spot lithium carbonate prices moved sideways in a narrow range. The futures market saw intensifying volatility, with the most-traded contract 2609's price range consolidating from 141,400-154,800 yuan/mt at the week's start to 137,200-148,500 yuan/mt. After hitting a weekly low of 136,800 yuan/mt mid-week, prices rebounded, while open interest continued to decline.

Market transactions reflected a pattern of downstream users buying the dip and purchasing as needed, while upstream producers held prices firm and held back from selling. Upstream lithium chemical plants showed strong sentiment to hold prices firm and hold back from selling spot orders, with persistently weak willingness to sell and firm quotes, keeping in-factory inventory at low levels. Downstream material plants continued their strategy of dip-buying and purchasing as needed, with purchase willingness strengthening when prices fell to relatively low levels, though large-scale restocking had yet to emerge. Trader inventories continued to destock due to downstream just-in-time procurement and lithium chemical plants holding back from selling. Overall, market inquiries and actual transactions remained relatively stable, while the spot-futures price spread continued to strengthen.

Supply-side production maintained a decreasing trend, with upstream inventory staying low. This week, lithium carbonate production continued its decreasing trend, mainly because some spodumene and lepidolite-based smelters underwent maintenance, coupled with gradually tightening circulation of spodumene ore, leading to a decline in the overall operating rate of lithium chemical plants. Looking at inventory changes: upstream lithium chemical plants showed noticeable sentiment to hold back from selling, keeping in-factory inventory at low levels; downstream material plants continued their just-in-time procurement strategy by buying the dip, with inventory remaining largely stable; traders' inventory continued to destock under the impact of downstream purchasing as needed and lithium chemical plants holding back from selling.

Looking ahead, short-term lithium carbonate prices are expected to maintain a slight upward consolidation trend within a range. Supply-side, ongoing maintenance at some lithium chemical plants and tightening spodumene ore circulation will lend support to prices; demand-side, downstream dip-buying continues, but large-scale centralized stockpiling has yet to appear. Currently, tightening spot circulation and a strengthening spot-futures price spread provide bottom support for prices. Close attention should still be paid to the August production schedule expectations of downstream players and whether there are expectations of further tightening in spot lithium carbonate circulation.