At the beginning of September, the domestic lithium carbonate market experienced a significant downward trend. As of September 7th, the benchmark price of battery grade lithium carbonate was 143000 yuan/ton, a decrease of 8.3% from the beginning of the month at 156000 yuan/ton, with a daily decline of 7000 yuan/ton on September 7th. This round of price fluctuations is not caused by a single factor, but rather the result of multiple factors such as inventory depletion falling short of expectations, changes in the supply-demand marginal pattern, market sentiment fluctuations, and capital linkage effects. The uncertainty of the traditional “Golden September and Silver October” peak season market in the industry has significantly increased.
The reversal of inventory expectations is the core incentive for the current lithium price correction
Previously, the market had predicted in advance the continuous destocking trend of the industrial chain, and lithium prices also maintained a relatively stable trend based on destocking logic. But the latest industry data shows that the pace of lithium carbonate inventory depletion has significantly slowed down. Although the industry’s inventory has remained depleted for 18 consecutive weeks, the scale of destocking has significantly contracted. According to relevant sample data, the recent decline in lithium carbonate inventory has significantly narrowed compared to the previous period, while weekly production has shown a significant rebound. The actual consumption data in the terminal market is lower than expected, highlighting signals of loose supply and demand margins. Combined with the recent optimization and adjustment of the inventory statistics system, it has further intensified the market’s concerns about inventory pressure, directly driving the futures market to fall rapidly and the spot prices to decline accordingly. Breaking the previous market pricing logic.
The marginal changes between supply and demand further suppress the trend of lithium prices
On the supply side, the overseas supply risks that disrupted the market in the early stage have basically dissipated, and the labor disputes of Chilean Yabao enterprises have entered the compulsory mediation stage. The originally planned strike plan has been suspended, and the premium of tight supply of overseas lithium resources has completely disappeared. At the same time, imported lithium mines from Africa continue to arrive at ports, and the production capacity of lithium salts that were previously shut down for maintenance in China is gradually resuming. The overall supply capacity of the industry is steadily recovering, and the market supply reserves remain abundant. However, the resumption of production in some domestic mines has been hindered, and there are still certain constraints on short-term new supply, resulting in structural differentiation on the supply side.
The expectation of weakening on the demand side has become the main bearish factor in the market. Entering the traditional peak consumption season, the market had high expectations for the recovery of lithium battery terminal demand. However, the recent news of top battery companies lowering their production schedules for September has raised doubts about the market’s ability to fulfill the “Golden September and Silver October” peak season. At the same time, industry research shows that the monthly production forecast for ternary lithium batteries has declined, and there is a risk of weakening in the long-term terminal demand for new energy vehicles. The concern of lower than expected demand growth during peak seasons continues to spread. However, there is still rigid demand in the spot market. After the sharp decline in lithium prices, downstream companies have increased their willingness to replenish inventory at low prices, and market inquiry activity has rebounded. The purchase of essential goods supports spot trading, which to some extent alleviates the downward trend in prices.
The emotional linkage in the capital market has further amplified the volatility of lithium prices
Recently, equity asset funds in the lithium battery sector have continued to flow out, creating emotional resonance between the stock market and the commodity market, exacerbating the downward pressure on lithium carbonate futures prices. At the same time, high warehouse receipts in the market continue to suppress the upward space of prices, and market funds repeatedly play games, making short-term lithium price fluctuations more severe, and the market trading mentality tends to be cautious.
Overall, the current fundamentals of the lithium carbonate market present a pattern of mixed long and short positions. In the short term, the industry will continue its destocking trend, and inventory is expected to remain at the level of 10000 tons in September. However, the destocking capacity has significantly weakened compared to August, and it cannot sustain the strong upward trend of lithium prices. The demand side has basic resilience in the short term, but the downward adjustment of production schedules by leading enterprises has caused temporary disturbances and increased market uncertainty. Specific attention still needs to be paid to the pace of overseas lithium mine arrivals, the progress of domestic mining and salt lake production capacity resumption, and the actual fulfillment of terminal peak season demand.
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