What will happen to lithium carbonate next? Goldman Sachs: Prices may fluctuate within a range until the supply-demand relationship tightens by mid-next year

Recently, the lithium market has shown a "price change every day" explosive trend, with lithium carbonate rising 70% from its low point this year. Goldman Sachs' latest on-site research report indicates that the lithium market will enter a "tight balance" state in supply and demand next year, with prices expected to maintain a range-bound fluctuation pattern.

On the 20th, the main contract for lithium carbonate futures continued its upward trend, with intraday gains reaching 4%, peaking at 102,500 yuan/ton, setting a new high for the year. From the spot market perspective, the intermediate price of battery-grade lithium carbonate is 99,250 yuan/ton, an increase of 1,700 yuan/ton compared to the previous trading day, and a 65% increase from the low point of 59,900 yuan/ton earlier this year.

The tightening of supply has become a key factor driving price increases. According to data from the Guangqi Exchange, domestic lithium carbonate social inventory has decreased for 13 consecutive weeks in November, with a cumulative reduction of 22,000 tons, and total inventory turnover days have dropped to 28.1 days, setting a new low since the futures listing.

According to news from the Chasing Wind Trading Desk, Goldman Sachs reported on November 19 that on-site research shows that China's lithium chemical inventory continues to decline at a rate of about 4,000 tons per week. The production resumption progress of the lithium mine in Yichun, operated by CATL, is not meeting expectations, further exacerbating market concerns about short-term supply. Before the mine's suspension, the average monthly lithium carbonate output was about 7,000-8,000 tons, accounting for about one-tenth of domestic demand.

On the overseas supply side, Goldman Sachs stated that direct shipping ore from South Africa and Nigeria is arriving in China at low costs (approximately $500/ton based on a 6% lithium oxide benchmark). Most African projects are considered profitable at current price levels, although direct shipping ore from other countries like Mali is deemed uneconomical.

Goldman Sachs believes that Chinese converters find it reasonable to expand production at current price levels, but due to a lack of sea-shipped spodumene, capacity utilization has reached its limit. Feedback indicates that lithium carbonate pricing may remain in the range of 80,000-100,000 yuan/ton (approximately $10,000-12,500/ton, excluding VAT).

Goldman Sachs believes that despite a positive demand outlook and continuous inventory decline, the expected increase in elastic supply could lead to further increases in African supply if prices rise.

Overall, prices are likely to remain range-bound until the expected tightening of the market in mid-2026 due to limited domestic supply in China and strong demand, with an average price forecast of $8,900/ton for lithium carbonate in 2026.

Cautious Outlook on Future Trends

The current upward trend is strong, but domestic analysts are cautious about future trends.

Zhang Weixin, a futures analyst at CITIC Jiantou, stated that the rise in lithium carbonate prices is mainly driven by continuous destocking and energy storage demand, but attention should be paid to the pace of resumption of production at lithium mines in Jiangxi.

Wei Zhaoming, chief researcher at Founder Medium-term New Energy, pointed out that there has been a weakening trend in energy storage cell shipments recently, with October energy storage cell production at 54.3 GWh and shipments at 52.98 GWh, marking the second consecutive month where production exceeds demand. There is a high possibility of seasonal decline in demand in the fourth quarter, increasing the risk of chasing high prices Xingye Futures analyst Liu Qiyue believes that the current open interest in lithium carbonate futures has reached a new high since its listing, and the price's short-term upward trend will continue. However, considering that futures prices are already at a high level, the improvement in the supply-demand structure still needs further verification