CITIC Futures: Weakening of supply and demand dynamics, lithium carbonate fluctuates sideways

Lithium carbonate’s initial and end-market demand has diverged. In March, supply and demand are still relatively strong, but the outlook for subsequent end-market performance remains to be seen. Supply remains relatively robust in Q1 2026; although some companies plan maintenance and production cuts, the overall level is still high. At the same time, demand is performing well. Downstream buyers have been actively stocking up after price pullbacks, and supply and demand remain in a tight balance, with social inventories gradually drawing down. The strong demand performance in March and Zimbabwe’s ban on lithium ore exports have provided a clear boost to market sentiment. However, sales of new energy vehicles in January and February are not optimistic, and further verification is needed in March and April, which is the key factor affecting the balance of supply and demand in the second quarter. If March’s demand for battery applications remains skewed negative, the risk is high that initial demand in April and early May will fall short of expectations. You should pay attention to mitigating the corresponding risks. In summary, the current lithium carbonate market faces a tight balance between supply and demand. Meanwhile, Middle East geopolitical events may trigger market trading around energy substitution, and the issue of Zimbabwe’s export ban has not yet been resolved. But on the battery-applications side, demand is not encouraging; sales in March and April may continue to decline. Therefore, in the short term, prices are likely to trade in a sideways-to-range-bound pattern while waiting for further catalysts. (CITIC Futures)