[SMM Analysis] A Broad Revival? Rise in Lithium Carbonate Prices Drives Active Inquiries in Upstream and Downstream Markets

As lithium carbonate prices rebounded recently, spodumene prices in the market also started to rebound. In terms of the domestic spodumene spot market, the rise in lithium carbonate futures prices on the Guangzhou Futures Exchange expanded the arbitrage space. Lithium ore holders increased their move to have lithium salt plants process lithium carbonate for them to hedge against the futures market. The quoted prices for directly selling lithium ore saw a relatively large increase. As a result, inquiries and quotations in the lithium ore market surged significantly, leading to a temporary appearance of "supply shortage." However, due to market concerns about oversupply of resources this year and no significant changes in downstream production, buyers do not expect the current lithium salt price rise to sustain over the long term. They remain cautious about the extent of the lithium ore price increase and temporarily refrain from making large-volume high-priced purchases. Additionally, the current actual inventory level of domestic lithium ore does not show shortages, so lithium salt plants within the industry generally accept the lithium ore price hike to a limited extent.

Overseas, Australian miners also witnessed the rebound in domestic futures prices and raised their spot quotations for lithium spodumene concentrate back above $1,000 per ton. Some companies have also shifted from the previous formula pricing to a flat price for lithium ore spot sales. At this price level, the corresponding lithium salt production cost for imported lithium ore has again reached over 100,000 yuan.

This wave of lithium salt market sentiment has also driven up prices for raw materials and downstream cathode materials both domestically and abroad, showing signs of a broad revival. However, feedback from downstream cathode enterprises suggests that their acceptance of the current high lithium salt quotations is indeed limited. Due to the persisting sentiment of lithium salt plants insisting on high prices and limited sales, and some cathode plants adopting a wait-and-see attitude before lithium salt prices rose after the Chinese New Year, resulting in fewer long-term lithium salt contracts signed. These cathode enterprises still need to make necessary purchases to complete downstream orders. The future market trend needs to monitor the actual production situation of downstream battery plants in March. If battery production has not significantly increased, cathode plants' acceptance of high-priced lithium salt will also decline.