SMM Monthly Forecast: Further Decline In Lithium Carbonate Prices To Be Limited in January  

Supply side, lepidolite lithium producers, facing fewer orders and losses, are likely to shut down for maintenance mid-January, coinciding with seasonal maintenance during Spring Festival. Recycled lithium salt firms, dealing with supply shortages and losses, are expected to reduce output. Chile's lithium carbonate exports to China fell 36.17% MoM in December, suggesting a drop in import volumes.

Demand side, slack December demand led to battery makers resuming normal buying. Surprisingly good vehicle sales perked demand for some cathode materials. With production halts for holidays in February, some orders are moved to January, keeping cathode scheduled production in January stable but subdued.

With ongoing surplus supply and price trends, short-term domestic lithium carbonate remains in excess. Falling prices for imported spodumene and domestic lepidolite have slightly weakened cost support for lithium salts. Continuing mine price drops will likely keep lithium carbonate prices low in an overcapacity market. However, Post-New Year, shipping and performance pressures on lithium salt firms eased, yet raw material purchases remain unprofitable. Short-term, these firms strongly support prices, with rising discounts for long-term contracts. Furthermore, cathode material firms resist high lithium carbonate quotes, targeting 80,000 to 90,000 yuan/mt purchases. Thus, short-term spot prices may stay weak, with limited further decline.