Since July, demand across the LFP industry chain has continued to rise, but the supply-side response has lagged. The most notable feature of the current market is that supply tightness is rapidly transmitting from downstream to upstream, creating a cascading inversion of "battery cell production schedule > LFP cathode production schedule > iron phosphate production schedule."

[SMM Analysis] The demand along the LFP industry chain continues to rise, but the response from the supply side is significantly lagging. The most notable feature of the current market is that supply tightness is rapidly transmitting from the bottom up, forming a cascading inversion of "battery cell production schedule > LFP cathode production schedule > iron phosphate production schedule," with the slow release of LFP capacity and the iron phosphate industry segment having become the most prominent bottleneck in the entire chain.

[SMM Analysis: Raw Material Price Hikes Push Up Production Costs, Electrolyte Prices Start an Upward Trend] Recently, upstream raw materials for electrolyte—including additives, lithium chemicals, and solvents—have all seen price increases, continuously squeezing the profit margins of electrolyte enterprises. As cost pressure is gradually transmitted downstream, the electrolyte has entered a price hike cycle.

[SMM Daily Review: Spot Lithium Carbonate Edges Down on July 31] Today, SMM battery-grade spot lithium carbonate prices edged down slightly from the previous working day. In futures, the lithium carbonate 2609 contract opened low at 143,900 yuan/mt today, briefly shot up to 144,400 yuan/mt before being pressured by bears, and prices consolidated lower and broke below the average price line. During the morning session, prices fluctuated weakly in the 142,000–143,500 yuan/mt range; near midday, bears intensified pressure, and prices rapidly dropped to around 140,000 yuan/mt. In the afternoon, prices consolidated at lows, and near the close, bears pressed again, causing prices to slide further and hit a fresh intraday low of 137,800 yuan/mt. The contract ultimately closed down 4.84% at 137,800 yuan/mt, with open interest decreasing by 3,001 lots. In the spot market, at month-end, the downstream procurement pace slowed, with purchasing on dips as needed dominating. Upstream lithium chemical plants continued to hold spot order prices firm, and long-term contract volume additions increased. Overall, market inquiries and actual transactions were relatively stable. In July, affected by maintenance at lithium chemical plants using both spodumene and lepidolite routes, China's lithium carbonate production saw a notable decline. Entering August, although maintenance at plants relying on spodumene and lepidolite continues, salt lake lithium extraction benefited from warmer weather, and output climbed significantly, which is expected to effectively supplement overall supply. Overall, China's total lithium carbonate production in August is expected to increase by 7% MoM.

Domestic lithium manganate market edged down slightly before stabilizing this week. Its price movement is highly correlated with lithium carbonate, lacking independent driving factors. Major producers maintain steady operation and prioritize deliveries to long-term clients. Ample supplies remain in the market without large-scale production cuts.

[SMM Cobalt Lithium Morning Meeting Summary: Raw Material Price Divergence Intensifies; Energy Storage Demand Supports Continued Industry Prosperity] This week, the relevant material markets continued to diverge in performance. Upstream ore prices stopped falling and rebounded, but high-price transactions remained constrained. Some ex-China capacities gradually recovered, and market attention shifted from supply disruptions to the pace of new capacity releases. Salt products were supported by maintenance outages, tightening circulation of spot orders, and low inventories, leading to somewhat active spot transactions. However, downstream players still mainly made just-in-time procurement on price dips, and concentrated stockpiling has yet to emerge. The cobalt industry chain remained under pressure overall, with the price centers of refined cobalt, intermediate products, cobalt salts, and cobalt powder shifting downward. Off-season demand, inventory pressure, and low-priced cargoes continued to weigh on the market. Nickel sulphate inventories declined, and cost support strengthened somewhat. Prices of ternary cathode precursors and ternary cathode materials generally remained stable. The LFP, electrolyte, and sodium-ion battery sectors performed relatively strongly, with demand from energy storage, commercial vehicles, and Q3 stockpiling driving production schedules higher. Inventories of some products continued to decline. The anode and separator markets were generally stable. Different raw material varieties in the recycling sector showed divergent performance. The overall industry chain remained in a phase of concurrent demand improvement and cost pass-through.

Spot lithium carbonate prices moved sideways in a narrow range this week, with the price center edging up slightly WoW. The futures market consolidated on a subdued note. The price range of the most-traded 2609 contract drifted lower from 143,300-148,200 yuan/mt early in the week to 140,600-149,400 yuan/mt. Mid-week, it hit a high of 149,400 yuan/mt before pulling back, and dipped to a low of 140,600 yuan/mt. Open interest continued to decline, with both longs and shorts mainly reducing positions. Market transactions showed a pattern of "downstream purchasing as needed and upstream holding prices firm while holding back from selling," and actual transactions were relatively active. Upstream lithium chemical plants had strong sentiment to hold prices firm and hold back from selling for spot orders, with willingness to sell remaining sluggish. Some enterprises anchored their willingness to sell spot orders at above 160,000 yuan/mt. Current supply was mainly based on long-term contract guarantees and "long-term contract + growth" delivery models. Downstream material plants continued their strategy of purchasing as needed and buying the dip, with relatively strong willingness to buy the dip below 145,000 yuan/mt for just-in-time needs, but limited acceptance of higher prices. There was little large-scale stockpiling, and procurement was generally stable as it was month-end. Traders were affected by both upstream supply contraction and limited spot order circulation, as well as downstream just-in-time procurement, and remained in a destocking state. Overall, market inquiries and actual transactions were relatively active. Supply side, production continued to decline significantly, and upstream inventory remained low. This week, China's lithium carbonate production continued to decline sharply, significantly affected by maintenance and production halts at lithium chemical plants using spodumene and lepidolite. Inventory changes: Upstream lithium chemical plants still maintained their strategy of holding back from selling spot orders, with persistently sluggish willingness to sell; combined with multiple plants entering maintenance, inventory remained low. Downstream material plants continued their pace of purchasing as needed; as it was month-end, procurement was generally stable, and inventory was basically stable. Traders, affected by both upstream supply contraction and downstream just-in-time procurement, continued destocking. The funding side showed a pattern of both longs and shorts reducing positions. Futures open interest continued to decline this week, indicating that both longs and shorts were closing positions; market wait-and-see sentiment intensified, and prices lacked a clear directional driver. Looking ahead, short-term lithium carbonate prices are expected to maintain a sideways consolidation pattern. Supply side, ongoing maintenance and production halts at some lithium chemical plants and tightening circulation of spodumene ore provided support for prices, with supply contraction being the main bullish factor currently. Demand side, downstream dip-buying and purchasing as needed continued, but large-scale concentrated stockpiling had not yet appeared, lacking sustained upward momentum. Going forward, key attention should be paid to the progress of maintenance recovery at lithium chemical plants, changes in downstream restocking pace, and production schedule expectations for August.

[SMM Lithium Battery Electrolyte Market Weekly Review: Electrolyte Prices Rose This Week (2026.7.27-7.3)] From July 27 to July 30, 2026, electrolyte prices rose. The future price trend of the electrolyte will still need to be continuously tracked for raw material price fluctuations and their transmission.

According to foreign media reports, recently, the state-owned enterprise Mutapa Energy Resources of Zimbabwe announced that its Sandawana lithium mine project confirmed 39.9 million mt of JORC-compliant lithium resources, of which 28.7 million mt are measured resources, accounting for about 72% of the total. It is reported that the resources confirmed at the Sandawana lithium mine project this time cover only about 30% of the approximately 3,800-hectare mining right area. The first phase of exploration for the project lasted 11 months, completed 103,000 meters of drilling and 33,000 sample analyses, with a cumulative investment of $24 million.

[SMM Daily Review: Spot Lithium Carbonate Prices Drifted Lower on July 28] SMM battery-grade lithium carbonate spot prices drifted lower from the previous working day. In the futures market, the lithium carbonate 2609 contract opened high at 146,600 yuan/mt today. After the opening, bulls briefly pushed prices, shooting the contract up to 147,700 yuan/mt, before encountering concentrated selling pressure from bears that triggered a rapid plunge. During the morning session, prices kept falling below the average price line (146,600 yuan/mt), hitting a low of 142,000 yuan/mt. Around midday, bulls and bears wrestled repeatedly within the 142,000–144,000 yuan range. In the afternoon, bulls lacked momentum for a rebound; after a brief rise, prices oscillated and pulled back again, then consolidated at lows near 143,500 yuan/mt toward the close. The contract finally closed down 1.75% at 143,500 yuan/mt, with open interest decreasing by 5,649 lots. In the spot market, as prices drifted lower, purchasing sentiment recovered among some downstream material plants that had been on the sidelines, with the sub-145,000 yuan/mt level acting as an anchor for rigid demand purchases. Upstream lithium chemical plants continued to hold prices firm. Overall, market inquiries and actual transactions were relatively active.