China's domestic lithium carbonate prices opened the week low and then rebounded in the second half in the session ending August 21. Prices traded in a volatile and slightly weaker range from Monday to Thursday before rallying sharply on Friday, closing the week on a firm note.
As of August 24, Mysteel assessed China's battery-grade lithium carbonate price at Yuan 158,050/tonne on average, up 3.0% from Yuan 153,500/tonne on August 21. Industrial-grade lithium carbonate reported Yuan 155,050/tonne, also up RMB 4,550/tonne from RMB 150,500/tonne last Friday.
Source: Mysteel
On the raw material end, the CIF price for 6% Li2O spodumene concentrate stood at US$2,325/tonne on August 24, tracking lithium carbonate prices higher. Australian spodumene's processing fees held at RMB 18,250/tonne, edging higher from June levels.
However, major lithium converters remained focused on supply-security procurement, with limited speculative restocking appetite, and processing fee negotiations between traders and producers continued. Ore inventories have moved off their recent lows, with traders' stocks at 150,000 tonnes and port inventories at 236,000 tonnes, suggesting the tightest phase has passed.
On the lithium salt side, industry inventories continued to draw down, with destocking concentrated at the converter level. Total lithium carbonate inventories fell by 6,320 tonnes week-on-week in the session ending August 19. However, GFEX (Guangzhou Futures Exchange) warehouse receipts continued to climb, reaching 41,290 lots as of August 24, with market estimates pointing to a further increase to around 50,000 lots by month-end. Rising warehouse receipts, together with higher lithium carbonate prices, have widened converters' margins and strengthened hedging appetite, limiting near-term price upside.
LFP prices moved higher in tandem, with power-grade LFP quoted at Yuan 55,900-60,200/tonne, up Yuan 300/tonne week-on-week, and energy-storage-grade LFP at Yuan 54,400-58,700/tonne, also up Yuan 300/tonne.
LFP cathode producers reported strong August order books, with production schedules rising around 5% month-on-month, providing solid demand support for upstream lithium salts.
Weekly lithium carbonate transaction volumes picked up notably from the prior week, though buying remained largely driven by essential needs. Some smaller battery cell producers showed willingness to chase highs, though actual acceptance remains to be seen.
In the near term, attention should be paid to the sustainability of the prices breaking above Yuan 160,000/tonne, the pace of Jianxiawo's restart, and changes in downstream procurement behavior.
Over the medium term, peak-season LFP demand is gradually materializing, and the lithium carbonate balance sheet is expected to sustain month-on-month drawdowns through the second half of the year. Lower industry inventory days should provide medium-term price support. However, the Jianxiawo restart expectation, rising overseas ore shipments, and elevated warehouse receipts remain key headwinds.
In summary, prices have broken above the previous range, and peak-season expectations are being validated, but rising warehouse receipts and industry hedging pressure warrant close attention, as does downstream price acceptance and progress on the Jianxiawo permitting.
Our view remains unchanged from early August: lithium carbonate prices are expected to trade rangebound in August, with a more constructive outlook from mid-September onward.
Written by Aggie Hu, huchenying@mysteel.com
