Guangfa Futures: Prices remain at a high level as news-driven disturbances weigh on sentiment, and the lithium carbonate market declines

Yesterday, lithium carbonate opened high and quickly weakened, with the decline expanding in the afternoon. News about mines in Jiangxi fermented during the day, and the main forces, after several days of continuous gains, showed a profit-taking mentality at high levels. Market sentiment weakened. By the close, the main contract LC2609 fell 2.84% to 174,260. On the news front, Zijin Mining’s earnings announcement showed a 97.50% year-on-year increase in net profit for the first quarter, and the company expects an equivalent lithium carbonate production of 120k tons in 2026; Longpan Technology plans to subscribe for 5% of GL1’s issued shares and has signed a lithium mine supply and prepayment agreement, stipulating that GLR will supply 40% of the spodumene concentrate for the Manna lithium project to the company annually, with a minimum annual supply of 70k tons.

Fundamentally, recent production data has maintained a slight increase, with the growth rate shrinking within the week. Smelting and processing operating rates remain relatively high. The key supply focus continues to be on raw material conflicts and the progress of new project commissioning. Overall demand remains resilient, with some improvement expected. Policy and seasonal factors have led to weaker vehicle sales data, with attention on increased battery charging and export-driven growth. Energy storage remains optimistic, with leading companies maintaining full capacity, and demand has strong certainty. Under rigid orders, material start-up is expected to remain steady. Structurally, lithium iron phosphate (LFP) is increasing, while ternary batteries are relatively weaker. Recently, market expectations for production scheduling in May have improved. Last week, social inventory continued to build, with a slight easing in the pace. Upstream smelters’ inventories continued to rise, and inventories at battery cell manufacturers and traders also accumulated, with downstream inventories remaining stable.

Overall, raw material gaps may gradually widen, and expectations for downstream production and inventory replenishment are improving. The fundamentals are resilient. In the short term, funds may worry about further upward price driving and adjust accordingly, but price support at the bottom remains relatively strong. Main forces are expected to fluctuate within a strong range, with reference to 165,000-175k. Short-term long positions can be reduced appropriately, and medium-term positions can still be accumulated on dips. (GF Futures)