What’s next for lithium carbonate? Goldman Sachs: Prices may fluctuate within a range until the supply-demand balance tightens around mid-next year.

What’s next for lithium carbonate? Goldman Sachs: Prices may fluctuate within a range until the supply-demand balance tightens around mid-next year.

Recently, the lithium market has been characterized by a "a new price every day" boom, with lithium carbonate surging by as much as 70% from its low point this year. The latest field survey report from Goldman Sachs shows that next year the lithium market will enter a state of "tight balance" between supply and demand, and prices are expected to maintain a range-bound pattern.

On the 20th, the main contract for lithium carbonate futures continued its uptrend, with intraday gains reaching up to 4%, peaking at 102,500 yuan/ton, a new high for the year. In the spot market, the mid-price for battery-grade lithium carbonate is 99,250 yuan/ton, up 1,700 yuan/ton from the previous trading day, and 65% higher than the year’s low of 59,900 yuan/ton.

Tightening of supply has become the key factor driving price increases. According to data from the Guangzhou Futures Exchange, domestic lithium carbonate inventories have fallen for 13 consecutive weeks in November, with a cumulative inventory drawdown of 22,000 tons. Total inventory turnover days have dropped to 28.1 days, hitting a new low since the futures were listed.

According to Chasewind Trading Desk, Goldman Sachs stated in its November 19 report that field research shows China’s lithium chemical stockpiles are continuously decreasing at a rate of about 4,000 tons per week. The restart progress of CATL's Yichun Jianshiawo lithium mine is falling short of expectations, further intensifying market worries over short-term supplies. Monthly lithium carbonate production at the mine before shutdown was about 7,000-8,000 tons, accounting for about one tenth of domestic demand.

On the overseas supply side, Goldman Sachs reported that direct-shipped ore from South Africa and Nigeria is arriving in China at low costs (about $500/ton for 6% spodumene Li2O base). Most African projects are considered profitable at current price levels, although direct shipments from other countries like Mali are not seen as economically viable.

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

Goldman Sachs believes that although the demand outlook is positive and inventories keep falling, flexible supply is expected to increase,and if prices rise, African supply is estimated to further increase.

Overall, prices are likely to remain in a fluctuating range until the anticipated tightening around mid-2026, when China's domestic supply will be limited and demand remains strong. The average price of lithium carbonate for 2026 is expected to be $8,900/ton.

The current rally is strong, but domestic analysts are taking a cautious view on future trends.

Zhang Weixin, analyst at CITIC Construction Investment Futures, stated that the rise in lithium carbonate prices is mainly driven by continuous inventory drawdown and energy storage demand, but the restart pace of Jiangxi lithium mines needs to be closely watched.

Wei Chaoming, chief researcher of new energy at Founder Mid-term, noted that shipments of energy storage cells have shown a weakening trend recently; in October, output of energy storage cells was 54.3 GWh, while shipments were 52.98 GWh, marking the second consecutive month that output has exceeded demand. There is a high possibility of a seasonal demand drop in the fourth quarter, which increases the risk of chasing the rally.

Liu Qiyue, analyst at Industrial Futures, thinks that current lithium carbonate futures open interest has hit a record high since listing. Short-term price momentum is likely to continue, but given that futures prices are already at elevated levels, further verification of supply and demand structure improvements is needed.

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