After opening low and touching and touching an intraday bottome of below Yuan 140,000/tonne, the most-traded GFEX lithium carbonate contract rebounded in the afternoon and finally closed the session in the positive with the bears leaving the market and bulls taking the lead.
While lithium ore spots availability remained low still as inventories continued to shift from traders to lithium refineries, major refineries have been moving quickly on procurement. In addition, with the futures curve now in backwardation, the carry cost for market players to roll positions is high, leading to some divergence in processing fee quotes. In addition, the resumption of production at major lithium mines and overseas shipments have both fallen short of expectations, leading to potentially significant drawdown in lithium carbonate inventories in July and August. However, the backwardated futures curve reflects persistent market pessimism over the sustainability of future demand. Compared with the supply certainty brought by elevated lithium carbonate valuations, future demand has yet to be validated.
------------------
Join our free webinar on July 31 to find out whether H2 lithium demand will outpace supply growth - and what it means for prices.
https://zoom.us/webinar/register/9417841882198/WN_aYI2w5VnQkCsZidJalLkqQ
