China Zhongjin Wealth Futures: Lithium Carbonate Prices Plunge Dramatically, Supply Increase and Demand Decline Are Main Factors

Lithium carbonate prices have plummeted. On the supply side, currently in the stage of new capacity release and routine production recovery, attention is on whether the actual arrival volume of Australian lithium resources can effectively offset the supply gap caused by the adjustment of Zimbabwe’s export policies. On the demand side, lithium-ion vehicle sales declined in January-February. While the long-term demand outlook for energy storage applications is clear, the internal rate of return for these projects constrains the upward space for lithium prices. The inability of downstream price increases to pass through due to excessively high lithium prices has led to a correction, which is in line with expectations. (CICC Wealth Futures)