July 21st, news:
The commodity market analysis system shows: Recently, the Chinese lithium carbonate market has shown an overall downward trend. As of July 21, the benchmark price for battery-grade lithium carbonate is 142,000 CNY/ton, a decrease of 11.8% from 161,000 CNY/ton at the beginning of the month.
Market support remains, providing a bottom for the Chinese market.
Inventory end, recently, the warehouse receipts, social inventory, and trader inventory of lithium carbonate in China have been continuously decreasing, gradually easing the overall inventory pressure.
On the supply side, affected by tight raw material supplies, the operating rate of spodumene lithium extraction production lines has declined. Coupled with the concentrated maintenance shutdowns at smelters in July and August, near-term supply elasticity is constrained, and a short-term tightening of supply is becoming increasingly evident.
On the demand side, China’s energy storage sector boasts a promising long-term development outlook. The “dual carbon” goals and the construction of a new power system provide foundational support, while the implementation of capacity-based electricity pricing is refining and diversifying profit models. Moreover, the integration of wind and solar power consumption with AI computing capabilities will continue to drive incremental growth.
Multiple negative factors are suppressing the rebound space of the market in China.
First, the spot market as a whole remains relatively loose. Downstream enterprises are merely maintaining a rigid demand procurement model, with cautious and weak purchasing sentiment. There are no large-scale inventory replenishment activities, and demand continues to lack sustainability.
Second, negative macroeconomic factors are becoming increasingly prominent, and the market lacks any core positive drivers, making it difficult to sustain a sustained rebound in prices. China is set to resume collecting certain battery consumption taxes. In the short term, downstream companies, in an effort to avoid these policy costs, are engaging in preemptive stockpiling, which provides a modest boost to near-term demand. However, looking further ahead, this policy will restrain the growth rate of industry demand, creating implicit downward pressure on lithium prices in the future.
Third, the persistent expectation of ample future supply continues to weigh on market sentiment. As Chinese lithium mines resume production and new capacity—such as lithium extraction from mica—gradually comes online, the future supply in the market is set to increase significantly, completely dispelling any expectation of a one-way upward price trend.
Overall, there is a divergence in the lithium carbonate market in the short and long term. In the short term, smelter maintenance limits supply, inventories continue to decline, and spot demand shows marginal improvement. The downward pressure on lithium prices is limited, and they are likely to maintain a low-level fluctuation and gradually stabilize. In the medium to long term, as future mine capacity is released and expectations of a more relaxed supply materialize, the market supply and demand balance may shift towards a more relaxed state, limiting the height of price rebounds. Specific developments will still need to monitor changes in market supply and demand.
