The fundamentals of lithium carbonate remain resilient, with marginal driving forces weakening; focus on real-world transmission.

Ask AI · Why does the marginal driver weaken despite the simultaneous rise in lithium carbonate supply and demand?

【Lithium carbonate fundamentals’ resilience continues as the marginal driver weakens; focus on real-world transmission】Cailian She, March 31—In recent times, lithium carbonate fundamental data has continued to show resilience. Real-world supply and demand have both increased, yet the marginal drivers have weakened. In the first quarter, smelting operating rates gradually improved; after the Spring Festival, weekly output data continued to rise. After salt works completed maintenance, operating rates continued to increase. Some new projects expanded early and then continued ramping up. April output expectations remain stable with continued increases. In the second quarter, the focus of core supply issues is still concentrated on conflicts on the raw-material side and the commissioning progress of new projects.

Demand overall maintains an optimistic outlook. At the beginning of the year, seasonal factors and the pullback of subsidies caused sales data for battery-powered vehicles to be relatively weak. However, a significant increase in terminal charging volume provides strong support. For energy storage, expectations are optimistic; leading companies in the space generally continue to operate at full capacity.

Under rigid orders, material production is expected to remain steady. Structurally, lithium iron phosphate continues to maintain month-over-month expansion, while ternary materials have shown relatively weaker performance due to market pressure and the impact of policy subsidy pullbacks. In the second quarter, attention is on changes in the structure of the powertrain terminal and export expectations.

In the first quarter, inventories maintained a de-stocking trend. Last week, it turned into stock-building, and the marginal drivers weakened. Upstream smelters’ inventories and downstream inventories continued to increase last week. Salt works’ stock-building expanded further; inventories at cell manufacturers and traders continued to decline slightly. (GF Futures)