China’s most-traded lithium carbonate futures contract on the Guangzhou Futures Exchange, for January 2024 delivery, surged by the daily limit of 7% to hit a high of 164,950 yuan per tonne on Thursday. All other contracts of lithium carbonate futures on the bourse, for deliveries in January, February, March, April, May, June, July and August, also surged by the daily limit of 7%
The rally of China’s lithium carbonate futures comes as lithium producers in northwestern China’s Qinghai province, a major production base, are conduction seasonal production cut and some lithium salt companies in Jiangxi and Sichuan cut production due to losses, said Xinhu Futures in a research note.
China’s domestic lithium carbonate output fell 11.9% in September from the previous month to 37,000 tonnes and the output is expected to decline further to 34,000 tonnes in October, according to data from consultancy Mysteel.
Chile’s lithium carbonate exports to China in September slid by 25% from the previous month, said Xinhu.
After the price of lithium carbonate dropped below 150,000 yuan per tonne, approaching the cost line of many mica lithium companies in Jiangxi, promoting mica lithium companies to support the prices, according to the note.
The production cuts in lithium salt plants, falling imports and companies’ intention to support the price, supply in the spot market of lithium carbonate is tightening, leading to a rebound in lithium carbonate prices this year, but from a medium-term perspectively, lithium carbonate prices could fell further due to oversupply and weak demand, it said.