Expanding supply-demand differential may drive lithium ore prices higher

Since the second quarter, the core logic of the lithium ore market has shifted to the expansion of the scissors gap under supply and demand tight balance, with multiple rigid constraints on the supply side and continuous recovery on the demand side. The slow bull market for lithium prices has officially kicked off, with the gap widening in the peak season of the third quarter and significant upward price elasticity.

Multifaceted supply constraints, global increment significantly below expectations

Domestic lithium salt monthly supply remains stable at 150,000 tons, but Jiangxi plans to reduce production by 10,000 tons this year, with no significant increase on the supply side.

Overseas supply risks are concentrated, with diesel inventory in Australian lithium mines only enough to last 1-3 weeks, posing a risk of production reduction; Zimbabwe's lithium concentrate exports are delayed until July-August, with short-term supply remaining tight; Brazil's production guidance of 5.4 million tons at the beginning of the year was significantly reduced, with actual release falling short of expectations.

Multiple factors have led to insufficient global lithium ore supply elasticity and highlighted rigid constraints.

Continued recovery in demand, with domestic demand revised up by 10% in May

New energy vehicles and energy storage are the dual drivers for the rebound in demand, with European pure electric car sales increasing by 70% in March; Domestic energy storage installations are growing rapidly, with a 95% year-on-year surge in energy storage system installations in February, accounting for 36% of the global energy storage system production, and leading enterprises' sales exceeding 200GWh in the first quarter.

Driven by the recovery in demand, domestic lithium demand was revised up by 10% in May, and the industry chain entered a new phase of active restocking and accelerated destocking.

Peak season gap amplification, lithium price center moves upward

The current supply-demand resonance has formed a clear upward driving force. As the traditional peak season of the third quarter approaches, the supply-demand gap will further widen, and the lithium price center is expected to break through 200,000 yuan / ton.

Under the resonance of supply rigid constraints and sustained demand recovery, the upward elasticity of the lithium ore sector is prominent, and the value of the resource side will continue to stand out.