Lithium Carbonate Futures Fall Below 110,000 Yuan, Hitting a New Low for the Year
nashnova research
China's lithium carbonate 2701 futures contract fell 8.37% on Oct 12 to ¥108,800/tonne, nearly halving from its May peak; a supply glut outlook and failed peak-season demand leave prices under continued pressure.
How far has it fallen?
The 2701 contract closed at ¥108,800/tonne, breaching the ¥110,000 level and setting a new year-to-date low.
In mid-May the same contract traded above ¥200,000/tonne. In under six months the price has roughly halved.
Spot markets are tracking lower too: battery-grade lithium carbonate is quoted at ¥118,500–122,000/tonne, industrial grade at ¥116,500–120,000/tonne.
What is happening on the supply side?
Jiangte Motor disclosed on Oct 11 that its Xikeng lithium mine — a 3-million-tonne/year mining project — passed safety-facility design review, with theoretical lithium-carbonate-equivalent capacity of roughly 15,000 tonnes/year.
This means → another mine is moving from approval to production, reinforcing the market's fear of a long-term supply overhang.
Separately, an environmental-impact assessment for the Jianxiawo lithium mine in Yichun was re-published, further strengthening expectations that mica-ore capacity — Jiangxi's dominant lithium source — will ramp up.
Why didn't demand catch the fall?
September supply-demand data came in soft, failing to confirm the traditional peak season — traders call it "peak-season falsification."
In plain terms = the strongest demand window of the year came and went without delivery, removing the last pillar under prices.
October has shown no material improvement. Unconfirmed reports of major producers cutting output plans have added to bearish sentiment.
What is the money doing?
Last week lithium-battery equities rallied against the trend, lifted by solid October production schedules and solid-state-battery policy expectations.
Today, however, capital flowed visibly out of the sector, dragging futures sentiment down in tandem.
This reflects the equity-futures capital seesaw: once a bullish catalyst disappoints, money exits fast.
Can lithium prices stabilize in Q4?
The case for stabilization: lithium-iron-phosphate and cell production schedules are expected to stay elevated; actual supply ramp-up is slower than feared due to mining-pace and marginal-cost constraints; absolute inventory levels are still converging toward lows.
The case against: analyst Ju Cunquan judges the prevailing trade logic remains "weak peak-season demand + long-term supply expansion + unresolved external risks + fading capital sentiment."
Everbright Futures argues that if the basis — the gap between futures and spot prices — keeps strengthening, and year-end supply disruptions in Africa and Jiangxi create a supply-demand mismatch, lithium prices could stabilize and rebound. But if a negative feedback loop — falling prices triggering output cuts that further contract demand — takes hold, prices will keep sliding.
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