SMM Analysis On Sentiment Of Market Players In Lithium Carbonate Industry Chain

SHANGHAI, Jun 5 (SMM) – SMM battery-grade lithium carbonate prices were 282,000-313,000 yuan/mt as of May 30, with the average price up 2,500 yuan/mt from the previous trading day to 297,500 yuan/mt.

Key event

It was rumoured that a salt lake enterprise in Qinghai province put up 3,000 mt of lithium carbonate for sale at 300,000 yuan/mt.

Market sentiment in industry chain

Lithium carbonate smelters held offers firm and were reluctant to make compromise. Some cathode material producers had to accept high prices due to rigid demand, while others refused to purchase at more than 300,000 yuan/mt. In this context, the quotation by the salt lake enterprise in Qinghai will only intensify deadlock in the spot market.

Speculation by traders

Traders tend to sell off when prices go down and hold back cargoes when prices go up. Hence, market players in the industry chain hold different opinions on whether they should cooperate with traders.

One downstream enterprise: Small downstream enterprises like us have to seek lithium carbonate from traders as smelters are unwilling to sell to us. Therefore, we have to accept high prices.

Another downstream enterprise: We absolutely oppose purchasing from traders as they tend to inflate market prices.

One smelter: We hope market prices are reasonable, open and transparent. We don’t want prices to rise or fall drastically due to speculation by traders.

Smelters made lucrative profits when lithium carbonate prices surged, but suffered severe losses when prices were in a downturn. Upstream and downstream enterprises oppose rampant speculative activities that were driven by profits. Traders also play an important role in the healthy development of lithium battery industry.

Views on current lithium carbonate prices

The current lithium carbonate prices are mainly driven by market sentiment and speculation by traders. In fact, market fundamentals have not been reversed significantly.