Price trend:

According to the commodity market analysis system of SunSirs, the price of lithium carbonate was experiencing an unexpected price rebound. As of October 28, the SunSirs benchmark price for domestic battery-grade lithium carbonate spot was 78,400 RMB/ton, up 7.51% from the beginning of the month, up 7.03% from the previous month, and down 0.76% from the previous year. The SunSirs benchmark price for domestic industrial-grade lithium carbonate was 76,633 RMB/ton, up 7.3% from the beginning of the month, up 7.13% from the previous month, and down 0.31% from the previous year.

The core logic of price increases: dual drivers of demand exceeding expectations and accelerated inventory reduction

Demand was not weak in the "off-season" :

New energy vehicles and energy storage were driving a dual-stage growth: In the first nine months, new energy vehicle sales increased by 35% year-on-year, far exceeding the 20%-28% growth forecast at the beginning of the year, and a full-year growth rate of over 30% was already certain. Overseas energy storage orders increased by nearly 132% year-on-year. Domestic first- and second-tier manufacturers had already booked overseas orders into next year.

Destocking boosted market confidence:

Since August, the lithium carbonate market has continued to destock. As of the week of October 24, weekly inventories fell to 130,000 tons, a decrease of 2,292 tons from the previous week. Although 130,000 tons of inventory remained high, increasing downstream demand meant there was no real pressure on inventory levels.

There was favorable support on the supply side

CATL's production halted, coupled with the delayed resumption of some production capacity in Jiangxi due to the expiration of mining licenses, had provided favorable support for prices. With the arrival of winter, salt lake production capacity in areas such as Qinghai and Tibet will enter seasonal constraints, further limiting supply growth.

Market outlook

The lithium carbonate data analyst of Sinochem believe that as of October 28, in the market environment where inventory reduction was accelerating and demand growth exceeded expectations, lithium carbonate prices had rebounded strongly and the short-term supply and demand pattern is improving. However, in the long run, there are still uncertainties on the demand and supply sides, and it still need to pay attention to market changes.

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