Analysts: Lithium carbonate futures prices still need to be cautious after oversold rebound
2023/8/17
Lin Jiani, a researcher at GF Futures, believes that the current fundamentals of lithium carbonate are not expected to undergo substantial marginal changes, the spot price has not yet stopped falling, and the overall sentiment is still pessimistic. Yesterday's rise in the disk is an oversold rebound. "After the recent industry meeting, the market has continuously confirmed the expectation of insufficient demand, and the short-term rigid demand replenishment drive expected by the market in the early stage has gradually been falsified. The month is expected to be mainly based on destocking. The decline in battery orders has driven the production of iron and lithium factories to reduce production. The demand for power batteries is expected to be poor, and energy storage is slightly better. In addition, the current upstream quotation is obviously loose, but the downstream acceptance is still not high, and the spot trading and purchasing of lithium carbonate is cautious.
"In June, when the price of lithium carbonate is still at a high level, we can expect the current weakness of the fundamentals." Zhang Weixin, a futures analyst at China Securities Investment, said that July-August is the off-season for automobile consumption, and June is under the pressure of mid-term reports. It is a small peak of sales and production, so the slowdown in the month-on-month growth rate from July to August is expected. At the same time, the increase in supply is superimposed, and the change in the relationship between supply and demand is also expected.
From a fundamental point of view, according to Baichuan Yingfu's statistics, on the supply side, the output of lithium carbonate last week was about 9,525 tons, a slight decrease of 3.79% from the previous week. In terms of demand, downstream construction has not recovered significantly, demand is weak, and the focus is still on cautious wait-and-see and rigid-demand purchases. The willingness to lower prices is strong, resulting in a continuous decline in spot lithium prices. In terms of inventory, lithium carbonate inventory was about 32,100 tons last week, an increase of 2.36% week-on-week. Under the influence of the mentality of buying up and not buying down, the inventory of lithium carbonate raw materials in the downstream remains depleted, and the inventory of upstream factories gradually accumulates.
"When the price falls into a downward trend, the role of inventory will change to supply. When the middle and lower reaches start to digest inventory and actively reduce inventory, the downward pressure on the spot will further increase." Zhang Weixin believes that the impact of inventory on the market is a tool " Double-edged sword". Since September-December is the peak season of automobile consumption, even if the active destocking is resumed, its strength will be limited. At least until the end of September, the middle and lower reaches will still maintain a healthy inventory level sufficient to meet the peak season demand.
On the news, Lin Jiani believes that the price reduction of terminal new energy vehicles may further suppress market sentiment.
With the slight rebound of lithium carbonate futures price, does it mean that the inflection point has been reached? "From the perspective of transaction positions, there are still great differences in the market. Due to the rapid price drop, the loss of imported raw materials has expanded, and the upstream has a tendency to reduce supply. Recently, there have been rumors that the upstream has reduced production to support prices. Choose more on-demand purchases or even take the initiative to go to the warehouse, the contradiction between supply and demand has increased, and the game between upstream and downstream has intensified. Based on the current supply-demand relationship and cost support, we are cautious about continuing to fall, and it is expected that the futures price may be close to the bottom of the stage." Zhang Weixin said, Under the current situation, the stabilization and rebound of lithium carbonate prices can only rely on changes on the demand side: first, after a rapid decline, there is replenishment in the middle and lower reaches; second, terminal demand exceeds expectations.
"Looking at the market outlook, September-December is the peak season for car consumption throughout the year, and the terminal demand is rigid. If the current over-digestion of inventory, there may be concentrated replenishment in September to help prices stabilize. The current market generally recognizes domestic new energy. The predicted consumption level of 9 million cars for the whole year, if more stimulus policies are introduced in the future and the actual consumption exceeds expectations, it will also bring support for stabilization.” Zhang Weixin believes that the oscillations in the past two days will also enhance the role of stabilizing expectations. However, the rebound should not be overly optimistic. In the long run, lithium prices have entered a downward channel, and the downward trend is expected to continue until 2025. The decline of futures will gradually slow down, and the space below is expected to be limited, while the spot price will maintain its decline and continue to explore, but it will be more difficult to break below the previous low.
"Lithium carbonate futures prices have weakened sharply at the same time, which is caused by the resonance of market reality and expectations. With the operation of the market, the direction of futures and spot prices has begun to converge." Yang Fei, an analyst at CITIC Futures, believes that with the release of supply , The forward surplus pressure of lithium carbonate is relatively large, the spot price of lithium carbonate will converge to a lower level in the fourth quarter of 2023, and the LC2401 contract is facing the dual impact of supply release and off-season consumption, with a large room for decline.
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