Lithium mining stocks have once again moved higher. At the time of writing, shares of Ganfeng Lithium Group Co.,Ltd. (HKEX: 01772) were up 6.27% to HK$61.95, while shares of Tianqi Lithium Corporation (HKEX: 09696) rose 5.01% to HK$46.96.
The upward movement follows market developments, including recent unverified data suggesting a significant inventory drawdown by traders, which pushed lithium carbonate futures back above the 170,000 yuan per tonne level. The main lithium carbonate futures contract continued its ascent this morning, gaining over 3% to 177,560 yuan per tonne at the time of writing.
According to analysis from Cinda Futures, a discrepancy in inventory data emerged. One set of trader-compiled data indicated a weekly drawdown exceeding 5,000 tonnes, while data released later by SMM showed a drawdown of 850 tonnes for the original sample and 1,300 tonnes for an expanded sample. This large variance is likely due to differences in statistical methodology.
Currently, market movements over the past two weeks appear to be the result of trading activity focused on warehouse receipts and demand expectations, with the recent intra-week trend largely reflecting a technical rebound from an oversold condition.
Analysts at CITIC Securities previously noted that in the first quarter of this year, production from major overseas lithium resource projects saw a slight decline, while selling price increases expanded. Stimulated by the significant rise in lithium prices, overseas lithium mines have initiated a wave of production restarts and expansions. However, uncertainties in supply growth persist due to production ramp-up timelines and increased regulatory controls on lithium resource development in several African nations.
Since May this year, concerns over demand and inventory fluctuations have weighed on lithium price performance. Nevertheless, the tight supply-demand balance is not expected to reverse in the short term. Lithium prices are still anticipated to strengthen in the second half of the year, with a target price forecast of 250,000 yuan per tonne being maintained.
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