According to the commodity market analysis system of Shengyi Society, on November 4th, the continuous rise of lithium carbonate came to a halt. The benchmark price of domestic battery grade lithium carbonate trading society was 80200 yuan/ton, and the benchmark price of industrial grade lithium carbonate trading society was 78433 yuan/ton, ending the previous upward trend of over 10% from 73016 yuan/ton (October 16th) to 80700 yuan/ton (November 3rd).
Core callback: Supply side rumors disrupt market confidence
The direct reason for this price correction is the market news that the resumption of production of Ningde Times’ Jianxiawo project is ahead of schedule. Although the project has not made any substantial progress publicly, its expected resumption of production directly impacts the market’s judgment of the supply pattern. The current monthly destocking scale of lithium carbonate market is 8000-10000 tons. If the project resumes production ahead of schedule, the newly added capacity may reverse the short-term destocking trend and trigger a price correction.
Fundamental core support: explosive demand for energy storage
In October, the total output of power, energy storage, and consumer batteries in the Chinese market reached 186 GWh, a month on month increase of 22.4% and a year-on-year increase of 45.3%. At present, the top battery companies are basically in full production, and some companies’ orders have even been scheduled until early next year. Both upstream and downstream industries are operating at full capacity. In November, it is expected that downstream production will continue to maintain month on month growth, and the off-season will exceed expectations to support the sustained improvement of fundamentals.
The continuous destocking trend of inventory continues
The industry has been destocking for 11 consecutive weeks, with a total inventory reduction of approximately 16000 tons. As of the week of October 30th, the weekly inventory of lithium carbonate was about 127000 tons, a decrease of over 3000 tons compared to the previous week, and the destocking rate further accelerated. Among them, the inventory of smelters decreased to 32000 tons, downstream inventory decreased to 53000 tons, and traders and other inventory decreased to 42000 tons.
The data analyst of Business Society’s lithium carbonate believes that the current “weak expectations” on the supply side of lithium carbonate and the “strong reality” on the fundamentals form a hedge. It is expected that there will be limited changes in the supply and demand relationship in November, and the overall situation will show a wide range of fluctuations. Specific attention still needs to be paid to project resumption information and market supply and demand changes.
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