Fundamental Logic and Market Sentiment Shift of Lithium Carbonate in China Price Decline

August 4th, news:

According to the commodity market analysis system: Recently, the price of lithium carbonate has risen and then fallen. As of August 4th, the benchmark price of battery-grade lithium carbonate in China was 70,833 CNY per ton, down 2.75% from the recent high of 72,833 CNY per ton (July 30th), and down 22.16% from 91,000 CNY per ton in the same period last year; the benchmark price of industrial-grade lithium carbonate in China was 69,666 CNY per ton, down 3.06% from the recent high of 71,866 CNY per ton (July 30th), and down 21.19% from 88,400 CNY per ton in the same period last year.

"Against the backdrop of 'anti-rat race,' there are expectations of reduced production and shutdowns in mines in China, driving up prices."

"Anti-rat race" has led to market expectations of supply-side contraction. Starting from July 25, a subsidiary of Jiangte Motor Corporation halted production for maintenance for 26 days, while Zhongkuang Resources' lithium salt production line in Jiangxi Province underwent a six-month technical renovation shutdown. Combined with mining license issues at Zangge Mining and CATL, the short-term supply gap has been magnified. This expectation pushed the price of lithium carbonate to rise significantly in July, increasing from around 60,000 CNY per ton to 70,000 CNY per ton.

After the price increase, actual market transactions were limited.

After the price increase, there has been a reduction in spot orders in the market. Downstream buyers are less willing to take delivery at high prices and are hesitant about the future price trend of lithium carbonate, mostly adopting a wait-and-see approach.

Sentiment is expected to decline, with fundamentals still dominated by oversupply in China.

Fundamentally, although the supply and production of lithium carbonate in China have decreased and the entire industry chain is experiencing destocking, the overall situation is still one of oversupply, with limited growth in demand.

Lithium carbonate data analysts believe: Although there is a trend of stronger regulation in the mining sector, overall, lithium carbonate is still in a state of supply and demand mismatch, with continued pressure for prices to fall. It is expected to remain weak and fluctuate in the short term, and specific developments will still need to be monitored based on changes in market supply and demand.