Lithium carbonate prices pulled back sharply following the introduction of the consumption tax on lithium-ion batteries earlier last week but recouped some of the losses in the second half. Mysteel's tracking indicates that spot transactions remained subdued, mainly because downstream consumers had built ample inventories during the earlier price decline, leaving a significant portion of lithium carbonate stocks accumulated downstream. As a result, despite lower absolute prices, spot buying interest has stayed weak.
On the supply side, lithium ore shipments from Zimbabwe remain constrained by congestion at the Port of Beira, which continues to weigh on near-term lithium carbonate output. Together with scheduled maintenance at some spodumene-based plants, supply is expected to remain comparatively tight in August. On the demand side, production schedules for lithium iron phosphate (LFP) and battery cells are projected to rise further, pointing to a strong demand month. The balance sheet is expected to show a significant drawdown, and lithium carbonate prices are likely to rebound after fully digesting the recent bearish sentiment.
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