Rumors of Production Resumption Break Lithium Carbonate's Upside Trend

November 4th News

According to the commodity market analysis system: On November 4th, the consecutive rise in lithium carbonate prices came to a halt. The benchmark price for battery-grade lithium carbonate in China was 80,200 CNY/ton, and the benchmark price for industrial-grade lithium carbonate was 78,433 CNY/ton, ending the previous upward trend that had seen prices rise from 73,016 CNY/ton (October 16th) to 80,700 CNY/ton (November 3rd), a cumulative increase of over 10%.

Core Callback: Supply-Side Rumors Disrupt Market Confidence

The direct cause of this price adjustment is the market news that the Ningde Era Jiaxiwo project in China will resume production earlier than expected. Although there has been no publicly disclosed substantial progress on the project, the expectation of its resumption has directly impacted the market's judgment on the supply situation. Currently, the monthly destocking scale of the lithium carbonate market in China is 8,000 to 10,000 tons. If the project resumes production ahead of schedule, the additional capacity may reverse the short-term destocking trend and trigger a price adjustment.

Fundamental Core Support: A Major Surge in Energy Storage Demand in China

In October, the combined production of power, energy storage, and consumer batteries in the Chinese market reached 186GWh, a month-on-month increase of 22.4% and a year-on-year increase of 45.3%. Currently, leading battery companies are basically operating at full capacity, with some companies' orders even extending into early next year. The entire industry supply chain is operating at full load. In November, it is expected that downstream production will continue to show a month-on-month growth, with the off-season performance exceeding expectations and supporting the continued improvement of the fundamentals.

Inventory continues to decline in a sustained trend.

The industry has been reducing inventories for 11 consecutive weeks, with total stockpiles declining by approximately 16,000 tons. As of the week ending October 30, lithium carbonate weekly inventories stood at around 127,000 tons, a decrease of more than 3,000 tons compared to the previous week, marking an accelerated pace of destocking. Specifically, smelters’ inventories fell to 32,000 tons, while downstream stocks dropped to 53,000 tons. Meanwhile, traders and other entities held 42,000 tons in inventory.

Lithium carbonate data analysts believe: Currently, the "weak expectation" on the supply side of lithium carbonate and the "strong reality" of the fundamentals are offsetting each other. It is expected that the supply-demand relationship in November will change little, presenting a broad fluctuation trend. Specific attention still needs to be paid to the information on project resumption and changes in market supply and demand.