[SMM Analysis] Spot prices for lithium carbonate rise amid volatility; September production plans up 11% MoM

Today, SMM’s spot price for battery-grade lithium carbonate rose amid volatility compared with the previous working day. The lithium carbonate 2701 contract opened higher today at 160,500 yuan per tonne. Shortly after the opening, it briefly dipped to 158,100 yuan per tonne, setting a new intraday low, before bullish capital actively stepped in, causing the price to rebound in a choppy manner. During the morning session, the price fluctuated firmly within the 160,000–161,000 yuan range, with the centre of gravity remaining above the moving average line; Around midday, the price consolidated near 160,000 yuan whilst gathering momentum; in the afternoon, bullish momentum continued to build, driving the price upwards in a choppy manner. Towards the close, it surged to 162,000 yuan per tonne—a new intraday high—before retreating slightly to close near 161,000 yuan per tonne. The contract ultimately closed up 3.21 per cent at 161,000 yuan per tonne, with open interest increasing by 11,148 contracts.

In the spot market, as the start of the month approaches, downstream materials manufacturers are seeing shipments of customer-supplied and long-term contract goods commence in succession; however, their willingness to purchase spot orders has become more cautious amid the fluctuating price rises. Upstream lithium salt producers have shown a slight recovery in their willingness to sell spot orders, with some plants that have not undergone maintenance and still hold inventory engaging in small-scale spot sales.

Regarding domestic supply, production lines for spodumene and lithium mica, which underwent partial maintenance in August, have gradually resumed operations. Meanwhile, influenced by seasonal factors, lithium extraction output from salt lakes has increased; however, as some salt lake producers have entered maintenance periods, overall output from both the salt lake and recycling sectors has remained largely stable. Moving into September, as maintenance on spodumene, lithium mica and salt lake production lines concludes and operations resume, output is set to rise significantly; at the same time, output from the recycling sector is also expected to increase, buoyed by a recovery in downstream demand. Taking into account changes across all sectors, total domestic lithium carbonate production in September is forecast to rise by approximately 11 per cent month-on-month.