SunSirs: Anti Internal Competition Drove Industrial Optimization, and Lithium Carbonate Continued to Rise

Price trend

According to the Commodity Market Analysis System of SunSirs, the price of lithium carbonate has shown a continuous upward trend recently. As of July 15th, the benchmark price of domestic battery grade lithium carbonate was 63,733 RMB/ton, an increase of 1.81% within 7 days and a month on month increase of 5%; The benchmark price of domestic industrial grade lithium carbonate trading company was 62,566 RMB/ton, up 2.68% within 7 days and up 6.05% month on month.

'Anti involution' alleviated supply side pressure

The sixth meeting of the Central Financial and Economic Commission proposed the "anti involution" policy to promote the withdrawal of outdated production capacity, and industries such as photovoltaics, steel, and cement have started to reduce production. The lithium battery industry is following policy guidance to accelerate the clearance of production capacity. It is reported that lithium carbonate and lithium hydroxide with a single production capacity of less than 3,000 tons/year (excluding the recycling of waste lithium batteries) belong to the category of elimination and should be eliminated within the prescribed time limit.

Market news states that a lithium salt factory in Jiangxi plans to shut down for maintenance for two months (resulting in a decrease of approximately 1,000 tons in monthly production).

From the perspective of foreign markets, the Kathleen Valley of Liontown Resources in Australia began to shut down for maintenance in July, affecting at least the monthly concentrate production capacity of 30,000 to 35,000 tons. The resumption time of maintenance was unknown. In addition, Chile's exports of lithium carbonate to China in June decreased by 41% year-on-year to 10, 200 tons, easing the marginal pressure on the supply side. 

Energy storage demand remained strong, exceeding off-season expectations

The EU has increased its energy storage subsidy budget and the Australian household storage market has exploded. Driven by both subsidies and market mechanisms, the demand for energy storage batteries is strong, and export demand is driving the production of positive electrode materials.

Domestically speaking, the layout of the independent energy storage market is accelerating, and the National Development and Reform Commission requires nationwide coverage and continuous settlement operation by the end of 2025. Multiple regions are exploring capacity compensation mechanisms to improve the economic efficiency of energy storage projects.

Future outlook:

According to data analysts from SunSirs, lithium carbonate is expected to rebound in the short term driven by market sentiment. In the long term, the total new production capacity of South American salt lakes (such as Atacama Salt Lake) and African lithium mines (such as Ganfeng Lithium's Goulamana project) in 2025 is considerable, far exceeding the demand increment. The situation of oversupply is difficult to fundamentally reverse, and the price rebound may be difficult to sustain. Specific market changes still need to be monitored.

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