According to data monitoring by Business News Agency, the prices of industrial and battery grade lithium carbonate fell sharply in March. On March 30, the average domestic mixed price of industrial grade lithium carbonate was 224600 yuan/ton, a decrease of 41.3% compared to the average price of 382600 yuan/ton on March 1. The average domestic mixed price of battery grade lithium carbonate on March 30 was 259000 yuan/ton, a decrease of 35.89% compared to the average price of 404000 yuan/ton on March 1.

According to the observation of market changes, the price of lithium carbonate continued to decline significantly in March. On the supply side, due to the rapid growth rate of China’s lithium industry in 2022, the production of lithium carbonate remained stable in the first quarter of 2023. The gradual warming of temperatures in places such as Qinghai Salt Lake has also led to a sustained increase in domestic lithium carbonate production and a high inventory level. In addition, most lithium salt factories this month mainly signed long-term orders, and the price of lithium carbonate continued to decline. In the atmosphere of buying up rather than falling, market inquiries were relatively light. With the end of the first quarter, some lithium salt factories are facing increased shipping pressure, resulting in low price selling in the market, accelerating the decline in spot prices.

On the demand side, the impact of the current cost side on lithium salt prices has weakened, and the demand side is the dominant factor. In 2023, the sales of new energy vehicles in the downstream market significantly decreased, resulting in a significant discount in the demand for lithium batteries, which led to a decline in the demand for lithium carbonate raw materials. Due to the weak demand in the downstream market, it is difficult for the market supply and demand relationship to support spot prices. Subsequently, the decline in the price of lithium carbonate continued to expand, and the actual transaction was not optimistic. However, the overall recovery of the terminal market was still less than expected, and overall downstream demand remained low and relatively weak.

The downstream lithium hydroxide market fell, and lithium carbonate continued its downward trend in early March. The cost faced with insufficient support for lithium hydroxide, the supply side production started relatively stable, and the market supply was relatively sufficient. However, the demand side slowly recovered, and the downstream follow-up was less than expected. The market atmosphere was weak, and the company’s quotation declined. In the middle of the year, there was a lack of support on the cost side, and the demand side was weak. Manufacturers mainly delivered long-term orders and clinched deals. Current market transactions were limited, and lithium hydroxide prices fell again. In the second half of the year, the support for the cost side weakened again, and the market purchasing atmosphere was depressed. Under the mentality of downstream enterprises not buying up or down, the market actually traded poorly, and the decline in lithium hydroxide continued.

The price of lithium iron phosphate in the downstream fell, but the inflection point did not appear in March as the price of lithium carbonate continued to decline; The price of iron phosphate fell, driving the cost of iron and lithium to continue to decline as a whole. However, there are fewer new orders in the lithium iron phosphate market, resulting in significant shipping pressure, and due to the weakness of the terminal market, the market recovery expectation is prolonged, with no significant short-term increase.

According to lithium carbonate analysts from Business News, the current lithium carbonate market remains in a state of oversupply. With the continuous lowering of prices, there is little left for procurement, except for purchases that are just needed. In order to increase shipments, lithium salt factories and traders have continuously lowered their quotations, and it is expected that the price of lithium carbonate will continue to decline in the short term.