[SMM Analysis] Spot lithium carbonate prices drift higher on the first working day after the holiday

Today, SMM battery-grade lithium carbonate spot prices drifted higher compared with the previous working day. The lithium carbonate 2701 contract opened lower at 118,300 yuan/mt today. After the open, bulls quickly entered the market, and prices shot up to around 123,500 yuan/mt before pulling back to consolidate. Around midday, bulls strengthened again, and prices climbed to an intraday high of 125,900 yuan/mt. In the afternoon, bears kept up pressure, and prices drifted lower in a one-sided trend, gradually giving back all gains. In late trading, prices accelerated downward, hitting a low of 117,200 yuan/mt before settling near 117,300 yuan/mt, ultimately closing down 1.28% at 117,300 yuan/mt. Open interest fell by 3,025 lots.

In the spot market, on the first working day after the holiday, some downstream players remained cautious and wait-and-see. Some traders sharply strengthened their spot-futures price spread quotes, while actual traded spreads largely held at pre-holiday levels. Upstream lithium chemical plants continued to hold back from selling spot orders and held prices firm, mainly shipping via long-term contracts with increased volumes. This week, China's lithium carbonate production declined overall. By raw material, spodumene-based production fell at some enterprises due to equipment maintenance. Salt lake-based production pulled back at some enterprises due to falling temperatures, while some enterprises also proactively controlled output, contributing to the decline. Recycling-based production continued to slide due to maintenance, and lithium extraction from slag was also constrained by raw material supply, with production likewise lower. Some enterprises had maintenance shutdowns scheduled in October. From the perspective of actual market transactions and inventory, upstream lithium chemical plants still mainly shipped via long-term contracts, and sentiment to hold spot orders firm and hold back from selling persisted. Combined with slower shipments at some enterprises during the National Day holiday, inventory at this segment accumulated slightly. Downstream material plants mainly consumed pre-holiday stockpiles and long-term contract deliveries during the National Day holiday, so their inventory destocked sharply this week. Trader inventory also edged down, mainly due to downstream cargo pick-up.