Spot lithium carbonate prices retreated after rapid rise and fluctuated at highs this week. Futures market fluctuations continued, with the most-traded contract 2609 contract price range moving from 174,800-181,400 yuan/mt at the beginning of the week to 172,100-178,900 yuan/mt, briefly dipping to a low of 169,500 yuan/mt mid-week. Open interest first increased, then decreased, and increased again, as the tug-of-war between longs and shorts persisted.
Market transactions exhibited characteristics of "divergent upstream shipments and downstream dip-buying." Upstream lithium chemical plants still showed willingness to sell spot orders at high prices, with some offers raised to above 180,000 yuan/mt. Downstream material plants had weak procurement sentiment, primarily making just-in-time procurement, with the psychological price level for large-scale stockpiling still anchored below 170,000 yuan/mt. Overall, the gap in psychological price levels between upstream and downstream participants remained.
Price fluctuations this week were driven by multiple factors: First, supply side, Zimbabwe has had no lithium concentrates shipments since the comprehensive ban on lithium ore exports from late February, compounded by mining license renewal disruptions at Jiangxi mines, and the tight balance pattern is expected to continue in Q2. Second, demand side, as new LFP capacity comes on stream successively in H1, it is expected to continuously and directly boost lithium carbonate procurement. Third, geopolitical fluctuations in the Middle East affected market risk-aversion sentiment, with intraday open interest changes indicating significant swings in capital sentiment. Looking ahead, against the backdrop of supply-side constraints yet to be substantially eased and positive demand expectations, spot lithium carbonate prices are expected to move sideways with an upward bias in the near term.
