Everbright Futures 0324 Hotspot Tracking: Energy Substitution as the Main Theme Returns, Will Lithium Carbonate Lead the Next Round of Market Trends?

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The energy substitution logic triggered by geopolitical situations has been strengthened, combined with the sensitive reaction of lithium metal in the stock market and the uncertainty of overseas resource supply forming a resonance. On Tuesday, the main contract for lithium carbonate surged over 6% during trading, leading the futures market. In the overnight market, discussions began about signals to halt the Middle East conflict, with the U.S. stating that “both sides have reached a significant consensus.” Precious metals and non-ferrous metals quickly surged, but as Iran indicated that there have been no discussions, either direct or indirect, the market adjusted again. Since March, market sentiment has continuously suppressed lithium carbonate prices, but recently, due to geopolitical issues, the long-term energy substitution logic has strengthened, and the stock market’s reaction has been more pronounced. Concerns about overseas resource supply have resurfaced, and in the short term, attention must be paid to whether there will be a gap in lithium ore supply. In the medium to long term, the upward trend in price centers is expected to remain, so it is still advisable to consider entering positions on dips.

In terms of spot prices, the average price of battery-grade lithium carbonate fell by 2500 yuan/ton to 146500 yuan/ton, the average price of industrial-grade lithium carbonate fell by 2500 yuan/ton to 143500 yuan/ton, and battery-grade lithium hydroxide (coarse granules) fell by 3500 yuan/ton to 138500 yuan/ton. Regarding warehouse receipts, the inventory of warehouse receipts decreased by 781 tons to 33537 tons yesterday.

From a fundamental perspective, the lagging demand data is temporarily unable to provide strong support, with high-frequency weekly de-stocking speed showing a significant slowdown, while downstream inventory levels have rebounded significantly. Therefore, if prices rise sharply in the short term, it may weaken downstream purchasing enthusiasm. On the supply side, weekly production data increased by 760 tons to 24186 tons; lithium carbonate production is expected to increase by 28% month-on-month in March to 106390 tons. On the demand side, ternary material production is expected to increase by 19% month-on-month in March to 84360 tons; lithium iron phosphate production is expected to increase by 24% month-on-month to 430000 tons. On the inventory side, weekly lithium carbonate social inventory decreased by 86 tons month-on-month to 98873 tons, with downstream increasing by 458 tons to 46105 tons, other links decreasing by 860 tons to 36160 tons, and upstream increasing by 316 tons to 16608 tons.

Written by: Li Qi

Professional Qualification: F3046227

Trading Consultation Qualification: Z0016145

Disclaimer: The information in this report is sourced from public data, and our company makes no guarantees regarding the accuracy, reliability, and completeness of this information, nor does it guarantee that the information and advice contained will not change. We strive for the report’s content to be objective and fair, but the views, conclusions, and suggestions in this document are for reference only and do not constitute any specific product or business recommendations or operational basis and advice for related products. Investors bear the responsibility for any investment decisions made based on this, and our company and the author bear no responsibility.

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Editor: Zhu Henan