This week, lithium carbonate spot prices experienced a pronounced downward correction. The SMM battery-grade lithium carbonate index fell from CNY 72,698/ton at the start of the week to CNY 71,787/ton, reflecting a weekly decline of CNY 911/ton. Heightened macroeconomic uncertainty has contributed to increased market volatility.
Market Drivers
1. Macroeconomic Pressures:
The U.S. administration’s proposed tariff hikes on Chinese imports have weighed heavily on market sentiment, serving as the key catalyst for this week’s price movement.
2. Supply-Demand Dynamics:
The market remains in a supply glut, with April sustaining a balanced but oversupplied environment. Despite some output curbs by smaller lithium producers, major Tier-1 and Tier-2 suppliers continue steady production, keeping overall supply elevated.
Downstream Activity
- Buying Sentiment Remains Cautious: Downstream cathode and battery material producers are largely on the sidelines, limiting purchases to essential demand.
- Pricing Discrepancy Persists: While upstream sellers have softened offers, bids from buyers remain well below asking levels, sustaining a stalemate in negotiations.
Short-Term Outlook
Given persistent oversupply and macroeconomic headwinds, lithium carbonate prices are expected to trade weakly with heightened volatility in the near term.
Key Monitoring Factors:
Upstream Production Adjustments – Potential output cuts by major producers
Downstream Inventory Restocking – Timing and volume of procurement
Trade Policy Developments – U.S.-China tariff implications
The market remains highly sensitive to both fundamental and geopolitical shifts, warranting close observation in the coming weeks.
