According to the Commodity Market Analysis System of Shengyi Society, lithium carbonate has shown a weak and volatile pattern recently, once again approaching the cost line. As of September 9th, the benchmark price of battery grade lithium carbonate trading company was 74033 yuan/ton, up 6.72% month on month and down 7.69% year-on-year. The benchmark price of industrial grade lithium carbonate trading company is 71966 yuan/ton, up 5.32% month on month and down 7.5% year-on-year.
Marginal improvement in supply and demand relationship, but inventory pressure still exists
The demand side is experiencing a seasonal rebound, and the production schedule for lithium iron phosphate materials is expected to reach a new high in September, with five consecutive months of month on month growth. The demand for energy storage batteries remains at full capacity.
Adequate supply side capability
The 40000 ton new project in Qinghai Salt Lake was put into operation in June, and the pyroxene production line of a lithium salt plant in Sichuan has entered the ramp up stage of production. Despite the accelerated withdrawal of high cost production capacity (partial shutdown of Australian hard rock lithium mines and Jiangxi mica mines), the overall operating rate of the industry remains high, and the resilience of the supply side remains strong.
Market driving factors: policy disturbance and cost game
In the short term, price fluctuations were disrupted by supply side policies. The shutdown of the Shixiawo mine in Ningde, Jiangxi Province, caused market concerns about supply contraction and led to a rebound in prices in August. However, as the market realized the limited impact of the shutdown and the expectation of resuming production emerged, emotions gradually cooled down.
Cost structure reshapes market competition pattern: Salt Lake lithium extraction, with its low-cost advantage, has shown strong resilience in the downward price cycle, further increasing its supply share. The increase in low-cost supply further suppresses the price rebound space, forcing high cost mines to shut down and accelerating industry clearance.
The data analyst of Business Society’s lithium carbonate believes that lithium carbonate is currently in a painful period of capacity clearance, and prices will repeatedly play around the cost line. Specific market changes and related policies still need to be monitored.
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