Shares of lithium miners experienced a downturn in the afternoon trading session, with Ganfeng Lithium Co., Ltd. (01772) falling 4.4% to HK$36.48, while Tianqi Lithium Corporation (09696) dropped 4.53% to HK$34.56. The decline comes as the market grapples with renewed concerns over supply dynamics and weakening demand signals.
The bearish sentiment was triggered by a sharp sell-off in the carbonate lithium futures market during the afternoon, with the main contract plunging by as much as 8% at one point, touching a low of RMB 140,540 per tonne. This represents a retreat of more than 10% from the peak of RMB 160,000 recorded at the end of last month.
Data released by a non-ferrous metals information platform showed that the weekly inventory drawdown had narrowed significantly on a sequential basis, while weekly production volumes had increased noticeably. These figures have contributed to a growing sense of pessimism regarding the near-term outlook for lithium prices.
According to analysts at Tongguan Jinyuan Futures, the supply side remains under pressure as lithium ore shipments from Zimbabwe gradually arrive at ports. Additionally, production lines that had undergone maintenance have now resumed full operations, and some new lithium ore production lines continue to ramp up output. This has led to a steady realisation of expectations for ample supply in the market.
On the demand front, recent lithium battery demand forecasts have been revised downward, while the case for sodium-ion battery substitution continues to strengthen. Although inventories are still in a drawdown phase, the persistently high volume of warehouse receipts is exerting pressure on the futures market from above.
With market sentiment gradually weakening in the short term, expectations point towards a range-bound but soft performance for carbonate lithium prices in the near future.
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