[SMM Analysis] Lithium Prices Break Through 200,000 Yuan/Mt, Energy Storage Price Transmission Enters Observation Period

Today, SMM battery-grade lithium carbonate spot prices continued to rise from the previous working day. On the futures side, the lithium carbonate 2609 contract opened high today at 208,000 yuan/mt, quickly surging to an intraday high of 208,800 yuan/mt after the opening before pulling back with fluctuations and falling below the average price line. During the session, it moved sideways around 205,000 yuan/mt, briefly dipping to 203,300 yuan/mt in the midday session. It rebounded slightly toward the close, ultimately settling up 1.54% at 205,300 yuan/mt, with open interest decreasing by 3,218 lots.

In the spot market, just-in-time procurement prices from downstream material plants broke through new highs. However, most material plants still primarily drew down long-term contract supplies, client-supplied materials, and earlier inventory, with weak willingness for immediate purchases. Some lithium chemical plants still showed willingness to sell spot orders at relatively high price levels, but traders, burdened by earlier inventory backlogs and high capital occupation costs, showed limited purchase willingness, and the blockage in market circulation remained unresolved. Overall market inquiries and actual transactions remained relatively sluggish.

Looking ahead, lithium carbonate is expected to maintain a relatively strong trend in the short term. It is worth noting that energy storage projects are quite sensitive to lithium carbonate price changes. Currently, lithium carbonate futures prices have broken through the 200,000 yuan/mt level but have not yet substantially transmitted to the energy storage end-user segment. From a contract structure perspective, most contracts signed between project owners and integrators adopt a "fixed price" model, especially for ex-China clients. A small portion of domestic project owners and integrators have signed contracts with price-linkage mechanisms, while domestically, integrators and battery cell manufacturers mostly use M-1/M-2 monthly average lithium carbonate prices for formula-based linkage. Currently, most 4h ESS quotes in China are approximately 0.52 yuan/Wh, with corresponding 314Ah energy storage LFP battery cell prices at approximately 0.35 yuan/Wh, anchored to a lithium carbonate price of around 150,000 yuan/mt. Therefore, new energy storage projects exhibit a notable time lag in responding to the current lithium price rise and have not yet demonstrated sufficient price elasticity.

In other words, the market is currently in a critical verification phase of "price signal transmission to downstream." What truly tests downstream affordability is not futures figures, but the lithium carbonate price levels that battery cell manufacturers and integrators are willing to lock in during actual procurement. Only when futures and spot prices effectively penetrate to this segment and trigger substantive adjustments in their procurement strategies or pricing systems can the true acceptance of the energy storage end-user segment for 200,000 yuan/mt or even higher price levels be assessed. Until then, the "relatively strong" lithium price remains largely at the expectations level, with its actual boost to downstream demand still relatively limited.