Price trend

According to the data monitored by SunSirs the prices of industrial grade and battery grade lithium carbonate in December showed a downward trend, and the prices kept falling. As of December 31, the average domestic mixed price of industrial lithium carbonate was 504,000 RMB/ton, down 11.73% compared with the average price of 571,000 RMB/ton on December 1. On December 31, the average domestic mixed price of battery grade lithium carbonate was 525,000 RMB/ton, a decrease of 10.56% compared with the average price of 587,000 RMB/ton on December 1.

Market supply

From the observation of market changes, the overall price of lithium carbonate in December was in a downward trend. Lithium salt plants on the market are still dominated by long-term contracts, with a small number of spot transactions. In early December, the news that Yongxing Materials temporarily stopped production due to its cooperation with the local environmental protection investigation received the attention of insiders. It is understood that the main investigated areas were Shanggao, Gao'an, Yifeng, etc. Among them, Yongxing New Energy, Tiancheng Lithium and Linneng Lithium had announced the temporary shutdown of lithium carbonate smelting enterprises, which had a certain impact on the overall production of lithium carbonate in December.

In late December, the price decline of lithium carbonate continued to expand, and the price of large lithium salt plants was slightly adjusted. Some of them sold on spot market, and the sentiment of price supporting was strong. As the annual sales plan had been completed, it was not in a hurry to issue individual orders, and they were also starting to sign long-term agreement orders for next year. However, traders had strong bearish sentiment, so the selling sentiment was heavy, and the transaction price kept falling.

Demand side

The purchase intention price of downstream Sanyuan and iron lithium plants had been continuously lowered, and the purchase intensity had been reduced. The downstream market tended to be cautious about raw materials and inventory preparation, market demand sentiment and expected price were weaker, and the downstream and terminal markets were basically in the state of digesting inventory, so the downward trend of lithium carbonate price was clear. With the approaching of the Spring Festival holiday, the positive pole factory generally reported that the order was reduced, and said that unless necessary, it might not plan to purchase before the year.

The market of lithium hydroxide in the downstream was weaker. Due to the downward trend of lithium carbonate, the demand side was slightly weak, the trading atmosphere in the spot market was flat, and the market of lithium hydroxide was falling. In addition, the positive pole factory said that it was unnecessary to purchase goods and continued to be bearish on the future market price, so the price of lithium hydroxide decreased.

The price of lithium iron phosphate in the downstream was weak. With the price of electronic lithium carbonate and industrial lithium carbonate in the raw material end entering the downward cycle, the wait-and-see mood in the downstream was getting stronger, and there was little purchase. All of them mainly consumed the early inventory or making a small amount of purchases on demand. The decrease in demand also led to a significant decline in the shipment of iron lithium enterprises in December.

Market outlook

According to lithium carbonate analysts from SunSirs the current market continues to be bearish on the price of lithium salt. At the critical moment of signing the 2023 long order at the end of the year, the game between salt plants and material plants continues. In terms of traders, the quotation continues to decline, and a small number of low price spot transactions continue to drive the market price to gradually lower. It is expected that the lithium carbonate price will continue to be weak in the short term.

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