September 7 news
According to the commodity market analysis system, China’s lithium carbonate market saw a noticeable downward trend at the beginning of September. As of September 7, the benchmark price for battery-grade lithium carbonate stood at 143,000 CNY per ton, down 8.3% from the early-month level of 156,000 CNY per ton. Notably, on September 7 alone, the price fell by 7,000 CNY per ton—a daily drop of that magnitude. This round of price fluctuations is not attributable to a single factor but rather stems from the combined effects of slower-than-expected inventory depletion, a shift in the marginal balance between supply and demand, volatile market sentiment, and the interconnectedness of capital flows. As a result, the traditional “Golden September and Silver October” peak season for the industry has become significantly more uncertain.
The reversal of inventory expectations is the core reason for this round of lithium price adjustments in China.
The market had previously anticipated a sustained trend of inventory destocking throughout the industry chain, and lithium prices had remained relatively stable, supported by this inventory-depletion logic. However, the latest industry data show that the pace of carbonate lithium inventory depletion has slowed significantly. Although industry inventories have been declining for 18 consecutive weeks, the scale of inventory reduction has narrowed markedly. Relevant sample data indicate that the recent decline in carbonate lithium inventories has substantially narrowed compared to earlier periods, while weekly production has shown a noticeable rebound. At the same time, actual consumption data from the end-market have fallen short of expectations, highlighting a clear easing of supply-demand dynamics. Coupled with recent optimizations and adjustments to inventory statistics systems, these factors have further intensified market concerns about inventory pressure, directly triggering a rapid pullback in futures prices and causing spot prices to follow suit—thus disrupting the previous market pricing logic.
Marginal changes on both the supply and demand sides further suppress lithium prices in China.
Supply-side concerns that previously disrupted the market, such as overseas supply risks, have largely dissipated. The labor dispute at Chile's Albemarle has entered a mandatory mediation phase, and the planned strike has been suspended, completely eliminating the premium caused by the tight supply of overseas lithium resources. Meanwhile, lithium ore imports from Africa continue to arrive, and China's previously suspended lithium salt production capacity is gradually resuming, steadily restoring the industry's overall supply capability and ensuring a continuous abundance of market supply. However, some mines in China are facing obstacles in resuming production, and there are still some constraints on short-term new supply, leading to a structural divergence in the supply side.
The weakening expectation of the demand side has become the main bearish factor in the market. Entering the traditional peak consumption season, the market originally had high expectations for a recovery in lithium battery terminal demand. However, recent news that leading battery companies have reduced their September production plans has raised doubts about the strength of the "Golden September, Silver October" peak season. Meanwhile, industry research shows that the monthly production expectations for ternary lithium batteries are declining, and there is a risk of weakening long-term terminal demand for new energy vehicles. Concerns about lower-than-expected demand growth during the peak season continue to spread. However, the spot market still has rigid demand. After the sharp drop in lithium prices, downstream companies are more willing to replenish their inventories at lower prices, and market inquiries have become more active. Rigid demand procurement supports spot trading, which to some extent eases the downward pressure on prices.
Market sentiment in the capital markets has further amplified the volatility of lithium prices.
Recently, there has been a continuous outflow of equity funds from the lithium battery sector in China, creating an emotional resonance between the stock market and the commodities market, which has intensified the downward pressure on the spot and futures prices of lithium carbonate. At the same time, high-position warehouse receipts in the market continue to suppress the upward potential of prices. The repeated bargaining of funds in the market has made short-term lithium price fluctuations more intense, leading to a more cautious trading sentiment.
Overall, the current lithium carbonate market fundamentals present a mixed picture of bullish and bearish factors. In the short term, the industry will continue to see inventory reduction, with September's inventory expected to decrease by tens of thousands of tons. However, the intensity of inventory reduction is noticeably weaker compared to August, which cannot sustain the strong upward trend in lithium prices. The demand side currently has basic resilience, but the production cuts by leading companies have introduced temporary disruptions, increasing the uncertainty of market trends. It is still necessary to closely monitor the arrival pace of overseas lithium mines, the resumption progress of Chinese mines and salt lake capacities, as well as the actual realization of peak season demand.
