The main contract for "white oil" lithium carbonate futures fell below 100000 yuan/ton, continuing to hit a new low since its listing.

On December 4th, all lithium carbonate futures contracts hit the limit down. As of the close, the main contract LC2401 fell 6.95% to close at 96350 yuan/ton, continuing to hit a new low since its listing.

Lithium carbonate, as one of the main lithium salts, is an important raw material for lithium batteries, mainly used in power batteries, energy storage, and 3C fields, also known as "white oil".

In terms of futures, since its listing, the highest price of battery grade lithium carbonate soared to about 600000 yuan/ton in November last year, and in just one year, it fell to the current 120000 yuan/ton, with a maximum decline of nearly 80%. As of December 4th, the main contract LC2401 for lithium carbonate futures has halved to below 100000 yuan/ton, continuing to hit a new low since its listing.

Has the price of lithium carbonate bottomed out?

Some institutions have stated that there will be a global surplus of nearly 200000 tons of lithium carbonate supply and demand next year,Lithium carbonateFutures are highly likely to fall below the 100000 yuan mark, and may even drop to 80000 yuan/ton before reaching a bottom and rebounding.

According to analysis by Zhengxin Futures, from the perspective of upstream lithium resource supply, next year will be a big year for mining and salt lake production. Multiple lithium projects, including those in Argentina and Zimbabwe, will be concentrated and put into operation, contributing significantly to the market. At the current lithium price position, the profits of mines and salt lakes are still very lucrative, especially for salt lakes with lower costs, which have sufficient expansion momentum. The rapid increase in lithium resource supply corresponds to the overcapacity of lithium carbonate in the coming years, which may continue to suppress the price of lithium carbonate.

Meanwhile, short-term demand is unlikely to improve. Midstream lithium batteries have entered the off-season for production scheduling, with battery manufacturers generally having high inventory. In November and December, the production scheduling of major battery and positive electrode manufacturers was relatively weak. Energy storage is also in the off-season, and downstream battery factories face fierce price competition. In the medium to long term, the penetration rate of the new energy vehicle industry has exceeded 30% and entered the mature stage, with a marginal weakening of the demand for lithium carbonate. Given the high sales volume of new energy vehicles this year, it will be quite difficult to maintain the same growth rate next year.

With the sharp drop in lithium carbonate prices, the cost of power batteries will also significantly decrease, and new energy vehicles will have greater room for price reduction. Before the Chinese New Year, people are expected to buy more cost-effective cars

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