Price trend

According to the commodity market analysis system of SunSirs, the price of lithium carbonate has fluctuated sharply recently. As of September 2, the SunSirs benchmark price of battery-grade lithium carbonate was 77,233 RMB/ton, down 7.76% from the previous week, up 8.27% from the previous month, and down 6.72% from the same period last year; the SunSirs benchmark price of industrial-grade lithium carbonate was 75,500 RMB/ton, down 8.11% from the previous week, up 7.4% from the previous month, and down 6.09% from the same period last year.

Supply-side disruptions became the dominant factor in short-term prices

In early August, CATL's Jianxiawo Mine in Yichun, Jiangxi (one of the largest lepidolite mines in China) halted production on August 9th due to the expiration of its mining license. The news that it would take at least three months to resume production became a major trigger for the price rebound.

At the same time, the combined effects of factors such as the compliance rectification of lithium mines in Yichun (8 mining companies were given a deadline to rectify the situation), the suspension of illegal mining at Zangge Mining, and the maintenance and production cuts at Jiangte Motor, as well as the Ministry of Industry and Information Technology's "anti-involution" policy to eliminate low-priced and disorderly production capacity, had led to strong market expectations of supply contraction, pushing prices up rapidly. The price of battery-grade lithium carbonate once rebounded from 60,000 RMB/ton to 80,000 RMB/ton.

However, the resumption of production at Jiangte Electric Motor's Yichun Yinli mine shattered this expectation. As a major player in the mica lithium extraction sector, its resumption of production meant a further increase in market supply, causing lithium carbonate prices to fall from 80,000 RMB/ton to 70,000 RMB/ton. This frequent supply fluctuation had led to recent sharp price fluctuations.

Demand was steadily increasing, but the growth rate was slower than supply

In August, downstream cathode production schedules increased by 4%-5% month-over-month, with demand slightly exceeding market expectations, particularly in energy storage. In the end market, new energy vehicle sales continued to perform well. However, recent data indicated a slight month-over-month decline in year-over-year sales growth.

In August, China's monthly lithium carbonate production reached a new high, exceeding 85,000 tons, a 5% month-on-month increase and a significant 39% year-on-year increase. The market was still in a stage of structural supply and demand mismatch.

Market outlook

A lithium carbonate data analyst of SunSirs believes that the impact of mine suspensions had not yet fully filtered through to supply and demand. The key to subsequent price fluctuations lies in whether the relevant mines can successfully complete reserve verification reports on September 30th and the subsequent mineral type changes. In the short term, lithium carbonate prices are expected to fluctuate, and further market fluctuations remain to be seen.

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