Lithium carbonate long-term agreement order or price increase? Latest response

Rumors of renegotiating the long-term agreement order of lithium carbonate has attracted attention. 

Recently, there have been rumors in the market that a meeting was held in Sichuan to raise the long-term contract price of lithium carbonate, which quickly attracted widespread attention from the industry. According to research reports from institutions such as Green Futures, major companies are interested in renegotiating long-term contract orders, aiming to reduce the proportion of long-term contracts and increase the proportion of individual and warehouse receipts. This dynamic may have an impact on the price of lithium carbonate spot market.

In response to this rumor, relevant sources said that the company does not sign long-term agreements, and at present, lithium carbonate manufacturers rarely sign long-term agreements, mainly because the price fluctuates greatly. For the meeting held in Sichuan, it was confirmed that it was true, but it was considered more like an annual meeting of the industry. At the same time, lithium industry and other relevant personnel all said that they have not heard of the above-mentioned meeting. The current price of lithium carbonate is priced according to market fluctuations, and they have not received news of adjusting the long-term agreement price. 

Long-term contract orders are usually used to lock in the prices and quantities of products in a certain period of time in the future, but they may bring certain risks in the market where prices fluctuate greatly. At present, the market price of lithium carbonate is affected by many factors, which fluctuates greatly. 

The relevant futures company stated that in terms of inventory, according to the latest statistical data, spot inventory is 109100 tons, including 34200 tons of smelter inventory, 29500 tons of downstream inventory, and 45400 tons of other inventory. The inventory pressure of lithium salt factories is not high. In the case of downstream demand for essential purchases or small reserve inventory, short-term price-raising sentiment is still present.

On the supply side, some overseas mining companies have recently reported production cuts, which has raised concerns in the market about the possible reduction of mineral resources. On the lithium salt side, domestic mica lithium extraction has maintained a relatively low operating rate due to a lack of raw materials and the shutdown of leading enterprises. Salt Lake lithium extraction has weakened productivity due to the use of brine and fresh water in winter.

Regarding cost, the downstream production schedule has performed well recently, and the upstream lithium salt factories have shown strong price support sentiment. The price support sentiment of overseas mines has rebounded, and the quotation has significantly increased.

On the demand side, on the one hand, thanks to the implementation of the trade-in policy and the year-end rush of car companies, as well as the increase in demand for positive electrode materials from battery factories, the main energy storage field has also entered a peak delivery period, coupled with the pre demand for customer supply next year, showing a phenomenon of "not weak in the off-season". On the other hand, the demand exceeded expectations, partly due to the reduction of subsidies from host and battery manufacturers next year, partly due to stocking up before the Spring Festival holiday, and partly to boost exports before the end of the year and the implementation of new policies, which may overdraw next year's demand. As one of the important raw materials for lithium batteries, the demand for lithium carbonate in the market continues to grow, but factors such as tight raw material supply and rising production costs have led to market price fluctuations.

In the future, with the rapid development of the new energy vehicle industry and the continuous advancement of energy storage technology, the demand for lithium carbonate market will continue to grow. Manufacturers must closely monitor market dynamics and policy changes, strengthen their technology research and development and cost control capabilities, and actively seek opportunities for cooperation with downstream customers, to cope with the challenges brought by market competition and price fluctuations.