Lithium carbonate: What are the concerns after the shutdown of Lithium Mine ? 2025/August /17th

Lithium carbonate: What are the concerns after the shutdown of Lithium Mine ? 2025/August /17th

After the shutdown, the entire contract for lithium carbonate hit the daily limit up. How significant is the impact of this mine on the fundamentals of lithium carbonate, and where will the market shift its focus to in the future? 1. Lithium carbonate is still relatively strong in the short term due to the news of the shutdown of the Yichun mine in Jiangxi Province by Ningde Times. There is uncertainty in the market about whether other mining areas will shut down in the future, and bears have panic expectations, with a short-term view of strong volatility. Affected by the shutdown of a salt lake in Qinghai and the maintenance of some lithium salt factories, the lithium extraction production from the salt lake and mica significantly decreased last week. However, the lithium extraction production from various types of raw materials has increased throughout the week and has been accumulated. If only one mine stops production, the domestic supply shortage may be lower than market expectations. It is expected that the transition to destocking will begin in mid to late August, and there may be a shortage of thousands of tons per month from September to October, until supply and demand adjust dynamically with prices after November, returning to tight balance or surplus. If more mines are affected and shut down, the shortage will increase accordingly. On August 11, 2025, the mining end of Ningde Times' Jianxiawo mining area ceased production at 12:00 pm on August 9, and no work will be carried out from August 10 onwards. There are no plans to resume production in the short term. This mining area is one of the largest lithium mica mines in Yichun area, and the news of production stoppage has become one of the core reasons for the fluctuation of lithium carbonate prices. The recoverable reserves of the Jianxiawo mining area are 774.92 million tons, with a designed production scale of 30 million tons per year and a service life of 25.83 years. The 33 million ton lithium bearing porcelain clay beneficiation project in the Jianxiawo mining area under Ningde Times is divided into three phases of construction. The first phase has a beneficiation capacity of 10 million tons per year and was completed in 2023. The associated lithium oxide grade in the Jianxiawo mining area is relatively low (average grade 0.27% -0.28%), resulting in high lithium extraction costs. The complete cost of lithium carbonate is about 100000 yuan/ton. The supply of lithium carbonate in the Jianxiawo mining area and supporting smelters is about 10000 tons per month, accounting for 12.5% of the total domestic production. Against the backdrop of tight supply and demand balance of lithium carbonate in the third quarter, production stoppage may result in a supply gap of thousands of tons per month. Although the price of lithium carbonate continued to decline in the first half of the year, the supply has not been effectively cleared, and the supply elasticity is still relatively high. The current production of lithium carbonate is at a high level, and the weekly production of lithium extraction from spodumene has reached a new high. The supply reduction caused by the shutdown of the Jianxiawo mining area can be covered by the increase in imports. If the price of lithium carbonate continues to rise, the production capacity of two new projects in Mali and two new mines in Australia may be released again, but imports will take time, and the domestic market may face a two month destocking cycle. As of the week of August 7th, the social inventory of lithium carbonate was 142400 tons, an increase of 692 tons compared to the previous week; The warehouse inventory of lithium carbonate in Guangqi Institute is 18829 tons, an increase of 12224 tons compared to the previous period. The market is still in a state of accumulated inventory. Except for the Jianxiawo mining area of Ningde Times, the expiration dates of mining licenses for the other seven mines are all after 2027, and the probability of all mines shutting down during the renewal period is relatively low. Consumer characteristics: The production of batteries in July and August increased by 2-3% month on month, and the peak season in September and October is expected to maintain a stable and small increase compared to the previous month. When the positive electrode factory rose in July, it was in urgent need of procurement. After the lithium price fell below 70000, the willingness to replenish inventory increased, and downstream inventory increased. [Galaxy Futures Futures Futures Breakfast 0811] Lithium Carbonate: What is the impact of the mining shutdown in Ningde Times' Jianxiawo mining area? --Galaxy Futures Shenzhen Branch Microservice

2. Today's limit up is the result of the resonance between supply disturbance expectations, peak season sentiment, and capital game, but the fundamentals have not yet formed a reversal support. The price center of lithium carbonate will gradually approach the marginal cost (60000 to 70000 yuan/ton), and with the acceleration of industry reshuffle, enterprises with low-cost resource layout will be more resilient. On August 11, 2025, all contracts of lithium carbonate futures hit the daily limit up, with the main contract (2511) rising 8% and now reporting 81000 yuan/ton. The mining license of Yichun Times New Energy, a subsidiary of Ningde Times, has expired, resulting in production stoppage and no hope of short-term resumption, affecting monthly supply of about 8000 tons (8% of domestic supply). Seven other mines in Jiangxi have been required to rectify environmental issues, amplifying market panic over supply contraction. Downstream demand saw a 14% year-on-year increase in retail sales of new energy vehicles in July. Downstream positive electrode material factories have increased their production schedules and inquiry activity, but their acceptance of high prices is limited. Spot transactions are mainly driven by rigid demand, and downstream material factories have only accumulated a small amount of inventory. Driven by the peak season sentiment, as we approach the stocking season for the new energy vehicle industry chain in September and October, downstream positive electrode material factories have increased their production schedules and increased their inquiry activity. Despite disturbances, the expected release of mineral resources in Africa and South America has not dissipated, and long-term supply elasticity still exists. The total amount of social inventory is 142400 tons, and the smelting plant is destocking and downstream replenishment, resulting in a slow pace of destocking and suppressing the upward space of prices. After the implementation of the new Mineral Resources Law, the compliance cost of lithium mining has increased, and potential policy disruptions to the supply side (such as the shutdown of Qinghai Salt Lake and the technological transformation of lithium mica) have been suppressed for a long time. The logic of early trading in the market is "supply rigidity+demand recovery", but the renewal of mining licenses requires approval from both the provincial and ministerial levels. If it is not completed by September 30th, there is no hope of resuming production in the fourth quarter, and there is a risk that the execution pace may not be as expected. Shenwan Futures Lithium Carbonate Market Review -202250811- Xue Hexiang, Zhao Xing Macro and Commodities

3. Lithium prices have rebounded significantly in the past week, and the long short game revolves around whether the mining license will be suspended. The mining license date has not been updated, and the game of whether to suspend production is still ongoing. Market rumors have a significant impact on prices. The smelter linked to Jianxiawo has started to extract lithium salts and purchase mica ore externally, and the industry chain cannot determine whether Jianxiawo will stop production. The divergence between long and short lies in the legality of production and public opinion pressure during the acceptance process of mining certificates, and local governments have strict requirements for lawful and compliant mining. It is expected that there will be a production stoppage in the short term, but the cycle will not be too long. It is expected to be resolved within 2 months. The existing inventory can offset the impact of the short-term production stoppage, making it difficult to reverse the global surplus situation. The trading pace is crucial. On August 10, 2025, the one week monthly spread stabilized, and the near end supply continued to reverse from 9-11. The weekly production of lithium carbonate has significantly rebounded. Lithium salt production rebounded in one week, with a weekly output of 19500 tons, a month on month increase of 13.2%. The weekly operating rate has increased. Salt lake enterprises resumed production, and the high lithium prices stimulated the load increase of pyroxene smelting plants. Mica production rebounded, with a total weekly output of 19556 tons, a month on month increase of 13.2%.

The FM quotation for lithium concentrate in one week, sc6 CIF China, has an average transaction price of about 760 US dollars. The profit from outsourcing ore has narrowed but is still considerable. The contract factories are actively resuming work, and some processing fees have increased. The production of lithium hydroxide in April was 25300 tons, with a year-on-year increase of -29%/-1%. Chile shipped one less ship in May and exported 9655 tons to China, a month on month decrease of 37.89%. Lithium carbonate continued to accumulate inventory for one week, with a sample inventory of 142400 tons, a month on month increase of 692 tons. The positive electrode production is expected to increase by 4-5% in August, and then enter the off-season of the industry. There are significant differences in expectations for the second half of the year, and the cash flow pressure of car companies is increasing. The inventory of the industrial chain may be reduced, but policy adjustments in Europe and Southeast Asia, as well as loose expectations for domestic fiscal policies, can still be anticipated during the peak season in the fourth quarter. The price of lithium concentrate has followed the decline in lithium prices, and the profit from outsourcing ore production has narrowed but remains considerable. The cash cost of integrated mica is about 60000 yuan, and the cash cost of some smelters is about 55000 yuan. Supply pressure persists for a long time, and the cost support center may shift downwards. Lithium carbonate: Three week expectation will be revealed on August 9th - Original article by Dadi Futures Research Institute

4. As the theme and anti involution resonance enter the second half of the second wave, the risk of bulls increases. Subsequent spot hedging will suppress price performance, and the peak of the market in the second half of the year may be nearing its end. After the short-term surge is completed, the price center may gradually decrease to below 70000 yuan. The financial strength and scope of this round of anti internal competition speculation are not as strong as the previous round, and the degree of spot lock up is weaker than the previous round. There is no situation where a large back in the term structure has prevented short sellers from shifting positions in the short term. After the baptism of two limit up rounds in the previous round, the risk tolerance of hedging and speculative short positions has effectively increased, without the stop loss pressure brought by the crowded short positions in the previous round. On August 11, 2025, the rebound of lithium carbonate in this round is mainly driven by the game of Jiangxi mining license theme. The market is paying attention to the renewal progress of a leading mine's mining license after it expires on August 9. If the renewal is blocked, the mine may be temporarily shut down, which is expected to affect the monthly average supply of 10000 tons of LCE. Driven by the hype of anti involution themes, mainstream anti involution varieties such as silicon-based and coking coal resonate with the rebound of lithium carbonate after completing a pullback. The expectation of anti involution will temporarily reverse the market's view on the prices of the industrial chain, but the dispersion of the industrial end will lead to increased competition on the supply side, suppressing the upper boundary of prices. The futures price was about 2000 yuan lower than the spot price in the early stage, and the price difference between futures and spot accelerated its contraction. The rebound in mineral prices has constrained the profits of smelters and dampened their production enthusiasm. The overall performance of downstream is stable, and the enthusiasm for replenishing inventory has increased after the price rises, but the actual increase in battery terminals is flat. Lithium carbonate: mining certificate expiration triggers a second shock - Wujiang Guotou Futures, August 11, 2025

5. The non renewal of the mining license for the Jianxiawo lithium mine has raised concerns about production stoppage, and market competition continues with intensified price fluctuations. If the mine is shut down, the price center of lithium carbonate will rise, but attention should be paid to factors such as weak demand, downstream stockpiling, and an increase in production from other production lines after price recovery. It is recommended to buy on dips. August 9th, 2025

The market is paying attention to the supply issue of lithium mines in Yichun, especially the expiration of the mining license for the Jianxiawo lithium mine. Currently, there is no clear official news, and market rumors continue, leading to intensified fluctuations in lithium carbonate prices. After the recent rebound in lithium carbonate prices, the output of various resource production lines has also increased, and the overcapacity situation has not eased. It remains to be seen whether the disturbance of lithium mines can bring about an improvement in supply and demand. In July, the production, wholesale sales, and retail of new energy passenger vehicles all decreased compared to the previous month. Terminal demand slowed down during the off-season, and channel inventory accumulation pressure was high, leading to an increased expectation of weak demand. The spot inventory of lithium carbonate continues to accumulate due to the rebound in production, with domestic social inventory exceeding 140000 tons. This week, deliveries were active, and warehouse receipts rebounded to nearly 20000 tons. 【 Lithium Carbonate Weekly 】 Focus on Lithium Mining License Not Renewal, Supply Concerns Lead to Market Surge - Original Research by Chaos Tiancheng of Nonferrous Metals Group

6. A securities firm's perspective on the "anti involution" of lithium carbonate. The short-term price of lithium carbonate is in the stage of oversold rebound, and market sentiment is driving the price up. In the medium to long term from 2025 to 2027, the global increase in lithium resource production capacity far exceeds the demand increment. Technological substitution may weaken the growth rate of lithium demand, and the pattern of oversupply is difficult to fundamentally reverse. In the long run, lithium prices of 60000-70000 yuan/ton have strong cost support, coupled with short-term supply disruptions and strong demand, and it is expected that lithium prices will emerge from the bottom range. On August 6, 2025, a series of measures will be gradually introduced from central ministries to industry associations, and then to top enterprises, aimed at regulating market competition order, regulating production capacity, and stimulating demand. At the end of May, the China Association of Automobile Manufacturers issued an initiative to oppose the dumping of goods below cost price. On July 1st, the sixth meeting of the Central Committee for Finance and Economics proposed to address the disorderly competition of low prices and promote the exit of outdated production capacity. On July 3rd, the Ministry of Industry and Information Technology convened a symposium with lithium battery companies to release industry standards, requiring sales to be no lower than cost price. 33 leading companies have signed the Industry Self discipline Convention, committing to phased production reduction and control. On July 14th, the Natural Resources Bureau of Yichun City required 8 mining enterprises to complete verification reports on changes in mineral types and reserves, which the market interpreted as a signal of supply contraction. On July 17th, Zangge Mining was ordered to suspend production due to illegal mining, causing a significant increase in lithium carbonate futures prices. On July 18th, the stock prices of lithium carbonate and related listed companies rose sharply, with Shengxin Lithium Energy hitting the limit up, Tianqi Lithium Industry surging by 5%, Zhongkuang Resources rising by more than 4%, and the stock prices of Fumiao Technology and Jiuwu High tech rising by 20%. Since reaching a temporary low on June 23, 2025, as of July 18, lithium carbonate futures prices have risen by 18.78%, with a ton price increase of over 10000 yuan, approaching 70000 yuan/ton. The price of battery grade lithium carbonate has risen from 60050 yuan/ton on June 23 to 66100 yuan/ton on July 18, with a slight increase of over 10%. The situation of oversupply of lithium carbonate still exists, and the industry is facing problems such as declining profits and losses. Tianqi Lithium expects a net profit of 0-155 million yuan in the first half of 2025, turning losses into profits. Ganfeng Lithium expects a loss of 550 million to 300 million yuan in the first half of 2025, with the loss narrowing. Shengxin Lithium Energy is expected to incur a loss of 720 million to 850 million yuan in the first half of 2025, with the loss expanding. Capacity utilization rate: Lithium carbonate production capacity of 1.3 million tons and output of 701000 tons in 2024; The production capacity of lithium hydroxide is 740000 tons, with a yield of 414000 tons and a capacity utilization rate of only over half. In the first half of 2025, China's lithium carbonate production increased by 32% year-on-year, while apparent consumption only increased by 25%, resulting in an oversupply of 28000 tons.