The lithium carbonate futures price remained capped by pessimism over future supply-demand balance. Mysteel's balance sheet shows a drawdown of 22,000 tonnes in July and an estimated 18,000 tonnes in August, indicating that the destocking trend remains intact but is moderating in scale. On the downside, lithium carbonate prices find support at Yuan 120,000/tonne, corresponding to the cost of lithium extraction from lithium slag. On the upside, resistance is seen at Yuan 150,000/tonne, which corresponds to the 30-day rolling average transaction price for lithium converters relying on outsourced feedstock. A trend reversal will likely depend on whether spot basis moves from discount to flat or even premium, a signal that spot liquidity pressure has been absorbed.
