The most-traded lithium carbonate futures contract listed on Guangzhou Futures exchange hit lithium up on the afternoon of October 12, and contract 2401, 2402, 2403, 2405, and 2407 did not re-open after hitting the up limit, indicating strong bullish sentiment on the market.
Source: Mysteel
The bulls were based on the expected tight supply of lithium carbonate in October.
In detail, the smelters in Sichuan and Jiangxi Province now hold low ore inventory, while the brine lake projects in Qinghai Province are slashing the production with falling temperature.
Source: Mysteel
Overseas, the lithium carbonate exports in Chile dropped 25.5% MoM in September, while the lithium ore sources from Australia, which jumped 14% MoM, will not arrive in China until end-October.
Based on Mysteel estimate, China's lithium carbonate production is expected at 34,000 tonnes in October, against a projected demand of 53,700 tonnes and falling imports, indicating a palpably supply gap.
Written by Aggie Hu, huchenying@mysteel.com