October 8th report:
According to the commodity market analysis system: In September, the traditional "Golden September" peak season expectations for the lithium carbonate market were not met. The spot price of battery-grade lithium carbonate fell from about 156,000 CNY/ton at the beginning of the month to 120,000 CNY/ton by the end of the month, a decrease of 23% within the month. The market sentiment shifted from previous optimism to a reevaluation of demand fulfillment, resulting in a tug-of-war between "loose supply reality and weakening demand expectations."
In early September, the market had high expectations for the "Golden September and Silver October," with downstream battery manufacturers and cathode companies' anticipation of stockpiling supporting lithium prices at high levels. However, starting from September 3rd, there were significant changes in inventory and apparent demand data; the speed of inventory depletion significantly narrowed, and apparent demand decreased month-over-month. Additionally, the labor dispute at Albemarle in Chile eased, reducing expectations of tight overseas lithium supply, leading to a rapid shift in market sentiment. On September 4th, spot prices dropped sharply, and futures saw a significant single-day decline, triggering panic selling in the spot market. Traders' willingness to sell increased, and downstream companies became more cautious, slowing their purchasing pace and no longer actively locking in large volumes of supplies at fixed prices.
From the supply side, China's lithium salt production continued to recover in September. Lithium salt companies that had undergone summer maintenance gradually resumed production, and lithium extraction capacity from salt lakes steadily increased. The volume of Australian lithium concentrate arriving at Chinese ports remained high, enhancing China's raw material security. Monthly lithium carbonate production continued to grow on a month-over-month basis. Although there were some temporary disruptions in lithium extraction from lepidolite, overall, the effective supply from China exceeded market expectations. Imports of lithium carbonate and lithium concentrate continued to flow into the market, further increasing the availability of goods.
** Demand ** is the core factor suppressing lithium prices this month. September is traditionally a restocking window for the new energy industry chain, but the peak season did not meet expectations, showing structural differentiation. Lithium iron phosphate (LFP) benefited from resilient storage demand and maintained high production levels; however, the output of ternary materials declined significantly. Rumors of leading battery manufacturers reducing the production of ternary batteries continued to disrupt the market, dragging down the overall demand expectations for lithium carbonate. Additionally, with the implementation of a consumption tax on lithium batteries, downstream cost pressure increased. The acceptance of raw material price increases by end-user automakers was limited, and cathode companies proactively controlled their inventory and purchased according to demand. Pre-holiday stockpiling was weak, and the pace of inventory depletion slowed. The judgment that "the peak season is not as strong as expected" gradually became a market consensus, limiting the rebound potential of lithium prices.
Overall, the decline in lithium carbonate prices in September essentially reflects the squeezing out of the premium from the previous peak season, with the market reverting from a "strong expectation" to a "weak reality." Currently, the fundamental situation in the industry does not indicate a collapse in demand; the energy storage sector continues to experience high growth, and the demand for lithium iron phosphate provides a bottom-line support. However, the growth in demand is not as robust as previously estimated. The supply side continues to release additional capacity, alleviating the tight balance between supply and demand, leading to an overall downward shift in the price center.
Looking ahead, the short-term lithium carbonate prices will still be in a demand validation phase. Specifically, attention should be paid to the fourth-quarter sales of new energy vehicles in China, the progress of energy storage projects, and the production recovery situation of downstream battery factories.
