On the first trading day of this week, influenced by the high macro sentiment, the total contract price of lithium carbonate futures rose to 80000 yuan/ton, while the spot price remained relatively stable between 75000 and 77000 yuan/ton, showing a separation between futures and spot trends.

At the close of trading on Friday, macro sentiment weakened and lithium carbonate fell. The main contract 2411 closed at 73900 yuan/ton, with a holding volume of nearly 200000 lots (tons); The recent contract of 2410 received 72600 yuan/ton. Multiple institutions have quoted spot prices higher than 75000 yuan.

For lithium prices, it has become a consensus in the current market that the bottom range of 70000 to 80000 yuan is tentative and the long-term upward space is limited. In the case where the structural boost from demand side new energy vehicles, energy storage, and other industries may not be high, the fluctuation of lithium prices will mainly depend on the impact of supply side adjustments such as lithium mines and lithium salts.

The first thing to pay attention to is the rebound in lithium ore prices and the sustained release of overseas supply.

At the beginning of September, lithium prices fell to test the 70000 yuan cost line, triggering a turning point in production and inventory on the supply side: Jiangxi giants such as Ningde and Jiuling announced the suspension of some lithium ore mining and selection, and the smelting side reduced production and transferred accumulated inventory to storage, providing support for lithium prices.

But this has also brought about a rebound in overseas mineral prices, with Australian spodumene concentrate prices hovering above $770 per ton; The domestic price of lithium mica ore also experienced a rebound in September. The cessation of lithium price decline leads to the stabilization of mineral prices, forming a mutually supportive situation, which is actually not conducive to the occurrence of top-down structural capacity clearance.

Market data shows that expectations for lithium ore and lithium carbonate imports are still on the rise. In August, the total import of spodumene increased by more than 100% year-on-year, and there was no reduction in Australian mines in September. The supply of lithium mines in Zimbabwe steadily increased, and the export of lithium carbonate from South American salt lakes increased significantly month on month, showing a strengthening trend. Combined with the short shutdown and maintenance cycle of domestic large factories and the availability of inventory as a buffer, the impact on actual production and sales is limited, which means that the supply of lithium carbonate in China will continue to be loose in October and November.

Secondly, we need to consider the changes in the inventory volume of lithium carbonate.

The expected destocking of around 30000 tons caused by the peak demand season of the Golden September and Silver October, as well as the production reduction of some lithium companies, has not yet exceeded the registered warehouse receipt of up to 40000 tons set by Guangqi.

At the end of November, there will be a centralized cancellation of warehouse receipts, and this portion of outdated lithium carbonate will flow into the market, which may be difficult to digest in the short term.

In addition, the main contract 2411 still holds a high position of nearly 200000 lots near delivery, which is expected to cause some fluctuations in the futures market.

While the supply on the production side is growing and destocking is not smooth, demand is expected to slow down or fall with the end of the "Golden September and Silver October", which will be manifested as a slowdown in order growth, continued pressure on material and battery inventory, and a decrease in demand for upstream lithium salts.

During the National Day holiday, the implementation of anti subsidy taxes on Chinese electric vehicles in Europe, as well as the continued weak demand for overseas electric vehicles, will suppress the volume of domestic automobile exports and the digestion of related excess capacity, thus suppressing the rebound space of lithium prices.