Lithium carbonate enters a tight balance phase, with prices steadily rising

December 2nd news:

According to the commodity market analysis system: Due to tightening supply and demand, the price of lithium carbonate has steadily increased recently. As of December 2, the benchmark price for battery-grade lithium carbonate in China was 94,366 CNY/ton, an increase of 2.28% compared to the same period last week (November 25), up 17.66% month-over-month, and up 16.22% year-over-year; the benchmark price for industrial-grade lithium carbonate was 92,533 CNY/ton, an increase of 2.32% compared to the same period last week, up 17.98% month-over-month, and up 17.73% year-over-year.

Demand Side: Dual High Growth in New Energy Vehicles and Energy Storage

The demand side is showing a prominent “dual-engine” trend: sales and production of new-energy vehicles continue to climb, driving robust growth in demand for power batteries; meanwhile, the volume of bidding for energy-storage projects outside China has doubled, and leading battery companies are operating at full capacity for energy-storage cells, significantly boosting lithium carbonate consumption. However, the first quarter is traditionally a slow season for power-end consumption, so power-cell production in December may see some degree of decline.

Supply Side: Multiple Factors Leading to Continued Contraction****

Australian mines have reduced production, and the commissioning of new projects at South American salt lakes has been delayed. In China, lithium extraction companies in Jiangxi Province have suspended operations due to environmental inspections, while Qinghai’s salt lakes have entered the seasonal low-production period, further tightening supply in the fourth quarter. However, as lithium prices rise, profit margins for lithium recovery are expanding, which could spur a rebound in lithium extraction output.

Inventory End: The destocking speed may slow down

Lithium carbonate’s weekly total inventory continues its trend of destocking. As of November 27, the latest data show that total lithium carbonate inventory has fallen by 109,000 tons, reaching just one-quarter of its peak level in 2023. Monthly destocking reached as much as 20,000 tons, indicating a significantly accelerated pace of inventory reduction. However, future demand may decline somewhat, potentially slowing down the current destocking trend.

Lithium carbonate data analysts believe: Currently, lithium carbonate is entering a stage of tight supply and demand. Although destocking is expected to continue, it may slow down. It is projected that prices will rise with fluctuations in the short term, but specific developments still need to be monitored based on market changes.