Frequent maintenance shutdowns at lithium converters in July and August, combined with strong demand, have driven a significant drawdown in lithium carbonate inventories in the third quarter. Spot buying interest has provided support near the Yuan 140,000/tonne level. On the demand side, LFP producers have reported strong orders in August.
Looking ahead to the medium term, the lithium carbonate balance sheet is expected to sustain a continued inventory drawdown each month through the second half of the year, with the year-end inventory-to-sales ratio likely to fall to relatively low levels, providing medium-term support to prices. In the near term, the magnitude of any price upside will depend on whether the spot basis remains firm, while the pricing of pessimistic forward expectations is gradually being priced out.
