Galaxy Futures: Lithium Carbonate Fluctuates Widely at High Levels

The fundamentals of lithium carbonate are likely in a stage of simultaneous supply and demand growth. The gradual resumption of demand in the short term may lead to a slight reduction in industry inventory. Due to the maintenance shutdowns at some lithium salt factories during the Spring Festival, domestic lithium carbonate production in February decreased by approximately 15%-16% month-on-month. As production lines resume operation one after another in March, it is expected that output will recover to around 100k tons. After the price of lithium rose, the operating conditions of non-integrated lithium salt manufacturers significantly improved, and their production enthusiasm increased. As of February 27, the spot cash costs for external lithium spodumene processing and lithium mica processing factories were 156,100 and 157.6k yuan per ton, respectively, with gross profits of 4,437 and 120 yuan per ton. Over the past two months, lithium exports from Chile to the domestic market have increased. In January, Chile exported a total of 39.3k tons of lithium salts LCE, a month-on-month increase of 76% and a year-on-year increase of 38.7%. Among them, lithium carbonate exports amounted to 22.9k tons, accounting for 58.3%, down 24 percentage points. That month, lithium sulfate exports hit a record high of 27.8k metric tons. In February, Chile’s exports of lithium carbonate to China reached 2,240 tons, a 32.0% increase month-on-month and an 85.9% increase year-on-year. Exports of lithium sulfate to China were 12.1k tons, down 56.50% month-on-month but up 17.10% year-on-year. With continuous destocking, the overall industry inventory has been at a relatively low level, providing some bottom support for lithium prices. ( Galaxy Futures )