This week, spot lithium carbonate prices drifted lower. The futures market was weak, with the most-traded LC2701 contract consolidating lower from 140,100-144,700 yuan/mt at the start of the week to 139,500-144,400 yuan/mt, hitting a mid-week low of 139,500 yuan/mt. Open interest increased overall, with intense long-short battles around the 140,000 yuan/mt level.
Market trading showed active downstream dip-buying for stockpiles while upstream held prices firm and limited sales. Upstream lithium chemical plants, as prices drifted lower, showed increasingly strong sentiment to hold spot order prices firm and limit sales, with limited low-priced cargo released. Some spot order quotes remained at 155,000-160,000 yuan/mt, while long-term contracts and additional volumes were shipped gradually, slightly destocking inventory. Downstream material plants, in the September-October pre-stockpiling period, adopted a dip-buying strategy, showing strong willingness to purchase and stockpile near 140,000 yuan/mt, with relatively active buying. However, some enterprises pushed their intended purchase prices below 140,000 yuan/mt, reflecting a cautious stance. Overall, market inquiries and actual transactions were relatively active, though price disagreements between sellers and buyers persisted.
Supply-side production gradually ramped up, with import data providing marginal guidance. This week, China's lithium carbonate production gradually increased as spodumene-based lithium chemical plants resumed production after maintenance and raw materials arrived at ports, while production from other raw material sources remained relatively stable. On imports, according to Chilean customs data, Chile's total lithium carbonate exports in August were 24,100 mt, up 3.07% MoM and up 42.48% YoY. Of this, exports to China were 14,261 mt, down 5.25% MoM but up 9.85% YoY. Chile's lithium sulfate exports to China in August were 16,300 mt, up 111.83% MoM and up 136.24% YoY, with the sharp increase in lithium sulfate imports reflecting higher processing trade activity. Looking at inventory changes: upstream lithium chemical plants held spot order prices firm and limited sales while long-term contracts were shipped gradually, slightly destocking inventory; downstream was in a stockpiling period, actively buying the dip, with inventory slightly accumulating; traders saw significant inventory destocking as upstream spot order shipments slowed and downstream bought the dip for stockpiles.
Looking ahead, short-term lithium carbonate prices are likely to continue consolidating. On the supply side, production resumptions after maintenance at spodumene-based plants and raw material arrivals are bringing growth, with supply gradually ramping up. On the demand side, downstream is in the September-October stockpiling period, with strong purchase willingness near 140,000 yuan/mt, providing clear support for prices. Going forward, attention should focus on the sustainability of downstream stockpiling pace, the progress of production resumptions and ramp-ups at lithium chemical plants, and the pace of raw material import arrivals.
