The most-traded GFEX lithium carbonate futures price recorded another winning day yesterday, with the market again eying bullish impacts. On the one hand, Citi recently published a research report indicating that, despite extremely weak investor sentiment, actual demand across the industrial chain remains very strong. The bank expects lithium prices could rise from the current RMB 150,000/tonne to RMB 250,000/tonne in the third quarter. In addition, near-term supply disurptions re-emerge, stemming primarily from delayed arrivals from Zimbabwe, slow restart at Jianxiawo, as well as routine overhaul at some domestic lithium converters.
Yet, these disruptions are unlikely to trigger sustained lithium rebound in the near term, with lithium carbonate prices likely to hover rangebound Although downstream demand has shown strong resilience recently, concerns over the sustainability of future demand persist. In particular, the rush-to-export effect ahead of the removal of battery product export tax rebates may have front-loaded some demand from 2027. At the same time, the reintroduction of a consumption tax on lithium-ion batteries could add uncertainty to whether strong demand can be sustained over the longer term.
