Spot lithium carbonate prices showed mixed movement on the first working day after the National Day holiday. The 2701 contract opened lower at 118,300 yuan/mt but quickly rose to 125,900 yuan/mt before pulling back. Open interest fell by 3,025 lots. In the spot market, downstream players remained cautious, with some traders adjusting spot-futures spreads. Upstream lithium chemical plants held back from selling spot orders, primarily shipping via long-term contracts. This week, China's lithium carbonate production declined due to maintenance, falling temperatures, and output controls. Recycling-based production continued to decline, and lithium extraction from slag was constrained by raw material supply. Some enterprises had maintenance shutdowns scheduled in October. Inventory levels in the upstream segment slightly increased, while downstream material plants saw sharp inventory destocking after consuming pre-holiday stockpiles and long-term contract deliveries. Trader inventory also edged down due to downstream cargo pick-up.
The production decline across different lithium sources reflects ongoing challenges in the industry. With some enterprises maintaining shutdowns and others controlling output, the overall supply remains constrained. The spot market's cautious sentiment and reliance on long-term contracts suggest continued uncertainty. The holiday period saw slower shipments, contributing to inventory accumulation in the upstream segment. Downstream demand has been more active, leading to sharp inventory reductions. The mixed price movement highlights the volatile nature of the lithium carbonate market.
With production challenges and inventory adjustments, the spot market remains sensitive to both short-term trading activity and long-term contract commitments. The holiday period's impact on shipments and inventory levels has further influenced price movements, indicating a complex and evolving market environment.