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SunSirs: The Price Decline of Lithium Carbonate Expanded, and It Will Be Weak and Downward in the Short Term

August 18 2023 10:56:37     SunSirs (John)

Price trend

According to the monitoring of the commodity market analysis system of SunSirs, the price decline of industrial grade and battery grade lithium carbonate continued to increase this week. On August 17th, the average domestic mixed price of industrial grade lithium carbonate was 222,000 RMB/ton, a decrease of 10.48% compared to the average price of 248,000 RMB/ton on August 13th. The average domestic mixed price of battery grade lithium carbonate on August 17th was 238,600 RMB/ton, a decrease of 9.83% compared to the average price of 264,600 RMB/ton on August 13th.

Analysis review

By observing market changes, it can be seen that the price of lithium carbonate had continued to decline and expand this week. In terms of supply, the upstream inventory was relatively high, and the production output of lithium salt plants fluctuated little, resulting in sufficient circulation of goods in the spot market. In addition, the continuous decline in lithium carbonate futures prices had driven the price of lithium carbonate to continue to decline.

In terms of demand, due to the continuous downward trend of lithium carbonate prices and a weak market mentality, downstream procurement became more cautious, and the atmosphere of loose orders and transactions in the market remained weak. However, downstream procurement had not yet started on a large scale, and there had been no significant improvement on the demand side. The overall market situation of oversupply was maintained. As of August 17th, many businesses were bearish on the future market, so the trend of purchasing suppressing pricing was not decreasing.

The price of lithium hydroxide showed a downward trend, but due to the weak and stable operation of the lithium ore market recently, the price of lithium carbonate had continued to be low, and cost support was weak. In addition, downstream demand was weak, and the enthusiasm for inquiry and procurement was not high. Market transactions were mainly based on demand, and the market was operating to be weaker.

The price trend of downstream ferrous lithium phosphate was downward, upstream raw material costs support was weak and market demand was poor. Downstream procurement was mainly based on demand, with weak willingness to stock up. The overall procurement atmosphere was cold and deserted, and the inventory level was high, with a stable operating rate.

In terms of futures, on August 17th, the opening price of the LC2401 contract for lithium carbonate futures on the Guangzhou Futures Exchange was 196,000 RMB/ton, with the latest price of 194,000 RMB/ton, a daily decrease of 1.7%, with 68,000 transactions and 26,791 positions.

Market outlook

Lithium carbonate analysts from SunSirs believe that some businesses were still affected by inventory pressure and bearish aftermarket conditions, and the phenomenon of reducing prices to promote transactions still existed. In the future, it is still necessary to pay attention to the actual demand for downstream procurement and replenishment, and it is expected that the price of lithium carbonate will continue to decline weakly in the short term.

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