[SHFE/LME zinc price ratio maintained fluctuating trend near 6.9]: This week, the SHFE/LME zinc price ratio maintained a fluctuating trend near 6.9, and the zinc ingot import window remained closed. Outside China, tensions in the Middle East had not yet eased, increasing market uncertainty. The US dollar index pulled back, and combined with persistently low ex-China zinc inventory levels, LME zinc maintained a fluctuating trend.

Spot lithium carbonate prices showed a continuous decline and pulled back from highs this week. The futures market performed weakly, with the most-traded LC2609 contract price range fluctuating downward from 187,600-193,900 yuan/mt at the beginning of the week to 175,200-184,100 yuan/mt, hitting a mid-week low of 175,200 yuan/mt, down approximately 5.8% for the week. Open interest first increased then decreased, and market sentiment was bearish. Market transactions showed a distinct "active on declines" pattern, with downstream purchasing enthusiasm rising as prices pulled back. Upstream lithium chemical plants held strong sentiment to hold prices firm and hold back from selling, with a widespread wait-for-rebound mentality. However, some enterprises that had hedged at earlier highs increased spot order shipments to downstream buyers. Downstream material plants saw sustained active downstream inquiries and purchases as prices continued to fall, initially focused on just-in-need restocking; as prices dropped further, purchase willingness grew increasingly strong, and restocking and stockpiling willingness gradually improved. Traders saw significant destocking due to large-scale downstream purchases. Overall, market inquiries and actual transactions became more active after price declines, showing a "buy on dips, watch on rallies" pattern. Supply side, multiple changes emerged, with production slightly decreasing but longer-term supply expectations increasing. Lithium carbonate production decreased slightly this week, mainly due to spodumene production line maintenance. In terms of inventory changes, as upstream lithium chemical plants continued to increase the volume of hedging-related registered warrants, combined with increased direct sales of lithium carbonate from lithium chemical plants to downstream buyers, upstream inventory showed a slight destocking trend this week. On longer-term supply, Mineral Resources Limited (MinRes) announced it would restart its wholly-owned Bald Hill lithium mine due to a significant and sustained rebound in lithium prices, with mining and crushing expected in June, first concentrates output in July, and the first shipment in Q1 FY2027. The expectation of incremental longer-term supply weighed on market sentiment. Import and export data indicated continued and growing ex-China replenishment. According to customs statistics, China imported 32,650 mt of lithium carbonate in April, up 9% MoM and up 15% YoY. Cumulative imports from January to April reached 116,000 mt, up 47% YoY. Lithium sulfate imports in April were 17,942 mt, up 9% MoM and up 296% YoY. Cumulative imports from January to April reached 58,900 mt, up 121% YoY, reflecting increased processing trade activity and exerting some pressure on short-term prices. Looking ahead, short-term lithium carbonate prices are expected to hover at highs. Supply side, key variables going forward include the progress of mining license renewals in Jiangxi, the pace of Zimbabwean concentrates arriving at ports, and the restart progress of the Bald Hill and Finniss lithium mines. Demand side, close attention should be paid to the sustainability of downstream purchasing enthusiasm and the actual volume increase in restocking and stockpiling. Short-term lithium prices are expected to maintain a fluctuating trend within the 180,000-190,000 yuan/mt range. It is recommended to closely monitor further changes in warrant volumes and actual progress in ore production resumptions.

This week, prices in the second-life application market remained largely stable overall, with relatively small fluctuations and a strong wait-and-see sentiment, resulting in a relatively subdued trading pace. Cost side, spot lithium carbonate prices continued to trend lower throughout the week, and although a slight rebound occurred during the period, it failed to reverse the downward trend, with overall prices maintaining a downward trajectory. Cobalt sulphate and nickel sulphate prices were simultaneously adjusted slightly downward, and the lithium battery raw materials market was in the doldrums overall. Supply side, major second-life enterprises maintained a stable shipment pace, with normal circulation of goods in the market, and no concentrated shipments or stockpiling by enterprises. The market currently lacks incremental supply, with raw material procurement and finished product shipments maintaining daily levels, and the overall supply landscape remained stable. Demand side, when lithium carbonate prices were previously at high levels, there was an intention in the market to raise battery cell prices, and downstream procurement enthusiasm increased somewhat. With prices of various lithium battery raw materials continuing to trend lower recently, cost support has weakened, and market expectations for price hike have completely dissipated. Downstream procurement attitudes have turned cautious, market willingness to adjust prices is sluggish, industry quotations generally remained stable, and significant market movements are unlikely in the short term.

Second-life battery market prices remained stable this week. Cost side, spot lithium carbonate surged earlier this week before pulling back rapidly, while cobalt sulphate and nickel sulphate prices largely traded sideways and held steady, with raw material futures showing clearly divergent trends. Supply side, the market overall maintained a regular shipments pace, with supply circulation proceeding smoothly and orderly. There were no signs of new capacity ramping up or concentrated inflows of supply, lacking significant incremental support, and the overall industry supply side remained neutral and stable. Demand side, the small power market has fully banned the use of second-life disassembled battery cells. The small power application channel that previously supported part of the demand for disassembled products was directly shut down, and there is currently no new substitute demand to fill the gap, forcing large volumes of disassembled products to be redirected to disassembly recycling channels for absorption. Although prices of disassembled products temporarily remained stable, overall transaction volume was extremely sluggish. For the Grade A and B market, earlier expectations for price hikes had emerged, driven by the sharp rise in lithium carbonate prices, but downstream acceptance of high prices remained low, and no effective high-price transactions materialized. As lithium carbonate prices pulled back rapidly, expectations for price hikes quickly faded, and the overall trading pace slowed down further.

Raw material side, spot lithium carbonate prices continued to rise this week, driven by supply-side disruptions that continued to strengthen tighter Q2 expectations and significant position increases in far-month contracts. Nickel salt prices edged up, while the cobalt salt market remained lackluster and basically stable.

The second-life battery market maintained overall stable prices this week. Cost side, spot lithium carbonate surged significantly this week with notable gains, nickel sulphate continued its gradual rise, while cobalt sulphate traded sideways and held steady. Raw material futures showed clear divergence, with lithium carbonate leading the gains and pushing up overall lithium battery raw material costs, also laying potential support for subsequent second-life battery cell pricing. Supply side, shipments from various producers remained at a steady pace, with no significant changes in circulating supply in the market. Although lithium carbonate rose strongly after the holiday, there was a time lag in the transmission of raw material costs to the second-life battery market. Current price negotiations remained concentrated in the upstream raw material segment, and second-life battery enterprises largely maintained stable quotes without raising prices in line with raw materials. Demand side, the continued surge in lithium carbonate pushed up costs, significantly dampening downstream purchasing sentiment and restocking willingness. In addition, concentrated stockpiling had already taken place before the Labour Day holiday, and most enterprises currently held sufficient inventory to support turnover. With no plan to make just-in-time procurement in the short term, a strong wait-and-see atmosphere prevailed across the market, with transactions mostly consisting of small, as-needed orders.