According to business agency data monitoring, lithium carbonate prices as a whole showed a downward trend in 2019. Although prices declined in the first half of the year, the decline was slightly more moderate. In the second half of the year, the market price of lithium carbonate began to fall sharply, until the end of the year, the price of lithium carbonate still did not see a positive phenomenon. On December 27, the average price of industrial-grade lithium carbonate in East China was 44400 yuan/ton, down 39.51 from 73400 yuan/ton at the beginning of the year (January 1). On December 27, the average price of battery-grade lithium carbonate in East China was 51000 yuan/ton, down 38.7 from 83200 yuan/ton at the beginning of the year (January 1).

Lithium carbonate prices flattened downward in the first quarter

In the first quarter of 2019, the price of lithium carbonate was still affected by the price trend in 2018 and showed a downward trend. According to lithium carbonate manufacturers, the market demand decreased significantly after the New Year's Day holiday. There was almost no inquiry downstream, and the overall market trading atmosphere was relatively cold. In addition, due to the impact of the Spring Festival holiday in the first quarter, enterprises in various places have entered a state of suspension of production and holidays. Therefore, prices have generally stabilized from mid-to-late January to the end of the holiday in mid-February.

At the end of February, the holiday atmosphere gradually faded, the purchasing atmosphere of downstream enterprises slowly began to improve, and market transactions slowly increased. However, the full resumption of lithium carbonate production began in March, and the production of lithium carbonate increased in some areas, coupled with the salt lake and Tianqi also began to fully release production capacity, thus driving the price of lithium carbonate downward.

In the first quarter of the lithium carbonate market, there was a two-level differentiation between large factory enterprises and small and medium-sized enterprises. Large factory orders were abundant and stable, and prices remained strong. In order to seize the market price, small and medium-sized enterprises have relatively low preferential prices, so the transaction range of lithium carbonate is relatively large.

Lithium carbonate prices mixed in the second quarter, relative volatility

Since the second quarter, due to the implementation of the new tax rate on April 1, some manufacturers have complied with the tax rate to reduce prices slightly. In addition, some chemical plants have experienced safety rectification, which has led to manufacturers reducing prices in favor of shipment and sales. This makes the second quarter of the early lithium carbonate prices are still low, but industrial-grade lithium carbonate and battery-grade lithium carbonate demand slightly different, industrial-grade lithium carbonate form to good, battery-grade lithium carbonate market is more stable, no obvious change.

After the end of the May Day holiday, the overall demand for lithium carbonate was better, the price remained stable, and the industrial grade lithium carbonate showed a slight upward trend. The price of battery-grade lithium carbonate also rose slightly, mainly due to the contraction of industrial-grade lithium carbonate supply and price increase, driving up the price of electric carbon in the industrial carbon purification process. Then at the end of the second quarter, the price of lithium carbonate began to decline. On the one hand, the new lithium carbonate projects in the upstream gradually began to be released, and the summer production peak was coming. On the other hand, the transition period of lithium carbonate market subsidy decline ended, and scattered orders were scarce. It is obvious that the market demand is not as good as before.

In the third and fourth quarters, the price of lithium carbonate appeared "down and down".

From the beginning of the third quarter until the end of the year, lithium carbonate prices have been showing a downward trend, although there is no cliff-like sharp decline, but the continued volatility of lithium carbonate prices have been hovering between the cost lines.

The main reasons for the continued decline in the price of lithium carbonate are: First of all, affected by the relationship between supply and demand, on the demand side, subsidies for new energy vehicles have declined, and terminal car companies have reduced related battery orders, which has led to a downturn in the lithium carbonate market. On the supply side, the overall production capacity of lithium carbonate has increased significantly, resulting in an imbalance between supply and demand; secondly, there are still a large number of ores and smelters to be digested in China, and the price trend of lithium carbonate is not optimistic. Considering the influence of weather, cost, inventory and other factors, the supplier is currently under the pressure of high inventory and cash flow. In order to ensure customer resources, it can only be forced to reduce prices to ship and withdraw funds; finally, in addition to the production and supply of domestic enterprises in the lithium carbonate market, the import volume of lithium carbonate has also increased. Imported lithium carbonate is using the cost advantage to ship at a low price, which also puts further pressure on the domestic lithium carbonate price.

After the market forecast

In summary, the price of lithium carbonate in 2019 can be said to have fallen into a trough. As the downstream market is shrouded by pessimistic expectations, the supply and demand of lithium carbonate is relatively unbalanced, the price of lithium carbonate is still fluctuating at a low level, and the supply and demand pattern of the in stock market is still depressed. Towards the end of the year, with further production cuts in the fourth quarter of downstream materials plants, smelters are more difficult to ship even if they cut prices, and enterprises may begin to gradually reduce production to reduce inventory levels, and industrial-grade lithium carbonate and battery-grade lithium carbonate prices will be further under pressure. Due to the early arrival of the Spring Festival holiday in 2020, the low price shock of lithium carbonate will continue, and the price of lithium carbonate is expected to remain low in the first quarter of 2020.