Lithium Carbonate May Remain in a Volatile Range in June

June 2nd news

Commodity market analysis system shows: In May, China's lithium carbonate showed a "first rise then fall" fluctuation trend. At the beginning of the month, the spot price rose from 177,000 CNY/ton to nearly 200,000 CNY/ton, and then fell back to 175,000 CNY/ton.

Looking at the market performance in May, at the beginning of the month, the effectiveness of Zimbabwe's ban on lithium ore exports, coupled with the suspension of lithium mica mines in Jiangxi Province due to changes in mining rights, led to a double tightening of China’s overseas supply, causing carbonate lithium inventories to deplete rapidly and driving prices sharply higher. After mid-month, as the market became concerned that high prices might dampen demand for energy storage, news of the resumption of production at Jianshawo kept emerging, gradually cooling market enthusiasm and resulting in a trend of first rising and then falling prices.

June supply is expected to continue the trend of contraction in China.

Overseas, Australia faces significant shipment fluctuations due to constraints on energy and transportation capacity, and the expected increase in production has yet to materialize. Although Zimbabwe’s exports have resumed, the prolonged shipping cycle means that the June increase will be difficult to reflect in actual figures. In South America, lithium salt lake production remains stable, with no new capacity coming online; supply is expected to continue tightening. In China, the shutdown and license renewal of the lithium mica mine in Yichun, Jiangxi Province, are ongoing, resulting in a noticeable monthly reduction in supply. Lithium spodumene extraction saw a slight decline, while lithium salt lakes and recycled materials showed modest increases—overall, the incremental supply is expected to remain limited.

Demand-side resilience exceeded expectations, strongly supporting lithium prices in China.

In the power battery sector: In May, China's new-energy vehicle sales rose 13% month-on-month, while Europe's new-energy vehicle sales increased by more than 30% year-on-year, driving a 4% month-on-month increase in power cell production. June’s production plans are expected to rise further.

In May, the output of energy storage battery cells increased by 9% month-on-month, and this growth trend continued in June. Downstream cathode material production rose along with the increased output of power and energy storage battery cells, with a month-on-month increase of 8% in May. This upward trend is likely to persist in June, further boosting demand for lithium carbonate.

Outlook: The tight supply and demand situation for lithium carbonate in June may intensify, providing support for price increases. However, there are also bearish factors: a large volume of overseas lithium ore is expected to arrive in China in July, which will significantly ease supply pressures. High lithium prices may also suppress downstream demand. Overall, it is expected that lithium carbonate prices will remain volatile in June, and it will be necessary to closely monitor changes in market supply and demand.