The long低迷lithium sector has shown strength in recent days, grabbing plenty of attention.

In the lithium carbonate futures market, the main contract has seen a continuous rise, regaining the 80,000 yuan/ton mark, boosting morale. The lithium mining sector in A-share has also surged, with the lithium index soaring 7.7% in two days, with many stocks hitting record highs, with gains exceeding 20% over the past two days.
Analysts told Ti Media APP that the short-term rebound in lithium carbonate futures is mainly driven by recent positive news, such as increased downstream demand, while the rise in the stock prices of lithium mining companies is compounded by expectations of improved industry performance.
Lithium Carbonate Futures Experience a Violent Uplturn, Reclaiming the 80,000 Yuan/Ton Threshold
After a month of oscillating below 80,000 yuan per ton, lithium carbonate futures have finally seen a substantial rebound.
On November 11th, lithium carbonate futures surged, reclaiming the 80,000 yuan/ton threshold. The LC2501 main contract closed at 80,950 yuan/ton, up 4.32%. Meanwhile, trading volume and positions also significantly increased, with the lithium carbonate weighted index adding 60,300 lots intraday, setting a new historical high.
On the 12th, the LC2501 main contract continued to rise, closing at 81,150 yuan/ton, up 3.38%. However, after surging to 82,500 yuan/ton, it reversed and fell, with an increase of 12,000 lots in positions, reflecting a fervent interest in capital speculation.

Compared to the swift rebound in futures prices, the market for spot prices has seen a relatively slower uptrend, with futures still trading at a premium over spot. As of November 12th, according to data from Shanghai Steel Union, battery-grade lithium carbonate prices rose by 1,000 yuan from the previous day, with an average price of 7.70 yuan per ton.
Huahai Securities' Chief Analyst for Metal New Materials, Xu Yongqi, told Ti Media APP, "The rapid rebound of lithium carbonate futures is due to underlying factors, namely, the social inventory of lithium carbonate is now entering a de-stocking cycle. Lithium salt plants and material plants have low inventory, and there is a need for replenishment for the latter two."
Shanghai Steel Union's newly released research report for the Ti Media APP also notes that as the circulation inventory enters the delivery month, battery and material manufacturers are experiencing good matching of warehouse receipts for procurement. Smelting plants have an inventory of 168,000 tons, down 4.5% year-on-year; traders have an inventory of 211,000 tons, down 7.9% year-on-year; and material and battery manufacturers have an inventory of 208,000 tons, up 5.1% year-on-year.
From the supply and demand perspective, the production on the supply side saw a slight decrease of 0.1% in November, with an estimated output of 58,900 tons. Some enterprises that purchase raw materials externally have increased their enthusiasm for hedging production, while technological upgrades in some companies in Qinghai have continuously impacted output, with an expected output in November remaining relatively stable. On the import front, Chile's exports to China in October saw a slight increase, and it is estimated that the import volume of lithium salts in China in November will not change significantly from the previous month. On the demand side, the estimated production of lithium iron phosphate in November is 263,000 tons. The car consumption market in November is looking positive, coupled with the rush to grid domestic energy storage and the growth of overseas energy storage projects, resulting in a 4.5% increase in lithium iron output from the previous month.
Recent spot prices have been on the rise primarily due to increasing downstream demand and upstream salt plant price support. Jinxiu Futures Analyst Zhang Ping also points out that prices for upstream lithium ore and lithium iron phosphate are rising, showing characteristics of a price increase in the supply chain. Demand for lithium carbonate is expected to strengthen this year, with social inventory continuously decreasing, providing support for lithium carbonate prices. Currently, the lithium carbonate futures price has broken through 80,000, creating a divergence between futures and spot prices, with short-term capital factors taking the lead. At the same time, attention should be given to the fact that the warehouse receipts of the Guangdong Futures Exchange have reached 48,900 tons, with limited remaining delivery warehouse capacity, which restricts the power of industrial hedging, and caution should be exercised in holding long positions in the short term.
The China Automotive Power Battery Innovation Alliance released data showing that in October this year, the installed capacity of power batteries in China reached 59.2 GWh, up 8.6% month-on-month and 51.0% year-on-year. Among them, the installed capacity of ternary batteries was 12.2 GWh, accounting for 20.6% of the total, down 7.2% month-on-month and 1.1% year-on-year; the installed capacity of lithium iron phosphate batteries was 47.0 GWh, accounting for 79.4% of the total, up 13.7% month-on-month and 75.1% year-on-year. From January to October, the cumulative installed capacity of power batteries in China reached 405.8 GWh, with a year-on-year increase of 37.6%.
Furthermore, with the implementation of the "cash for old, buy new" policy and automakers' year-end rush, auto consumption surged in October, propelling the installation of batteries to a monthly record high. According to data from the China Association of Automobile Manufacturers (CAAM), new energy vehicle production and sales reached 1.463 million and 1.43 million respectively in October, marking year-on-year increases of 48% and 49.6%. New energy vehicle sales accounted for 46.8% of the total new car sales. From January to October, new energy vehicle production and sales were 9.779 million and 9.75 million respectively, with year-on-year growths of 33% and 33.9%. New energy vehicle sales accounted for 39.6% of the total new car sales.
Li Shuheng, a researcher from Citic Futures, also believes that, in addition to the positive factors such as the demand exceeding expectations in November, the downward revision of future production guidance by some overseas mining companies in their third-quarter reports has also fueled bullish sentiment. The latest financial reports from major Australian mines indicate that the market has adjusted its outlook for the supply and demand in 2025, with some lithium mine production guidance being lowered, expanding the scope of production cuts.
Liontown plans to reduce its ore production target to 2.8 million tons by the end of the 2027 fiscal year, down from the previous 3 million tons annually, aiming for a total of 260,000 to 295,000 tons of SC6 spodumene concentrate production. Pilbara intends to place its Ngungaju plant in maintenance mode starting December 1, 2024, and has lowered its lithium concentrate production guidance for the 2025 fiscal year by 100,000 tons to 700,000 to 740,000 tons.
Lithium Mining Stocks Soar on Improved Performance Expectations
The A-share lithium mineral sector, in tandem with the lithium carbonate futures, has also seen a surge. Wind data shows that from November 11th to 12th, the lithium mineral index (884785.WI) experienced a significant rise, with a cumulative increase of 7.80% over the two days.
(Lithium mining stock index daily candlestick chart, Source: Wind)
Several lithium mining stocks surged significantly, with Weiling Co. (002667.SZ), Yongshan Lithium (603399.SH), and Tianhua New Energy (300390.SZ) seeing cumulative gains of over 20% in two days, with Weiling Co. experiencing two consecutive trading days of record highs; Yongshan Lithium and Ganfeng Lithium continued their rally after hitting a trading halt on November 11, with Ganfeng Lithium's two-day gain reaching 16.53%; additionally, seven stocks including Zhongguang Mining Resources (002738.SZ), Yongxing Materials (002756.SZ), and Tiance Lithium (002466.SZ) all saw gains of over 7% in two days.

As for the rationale behind the rise in lithium mining stocks, Xu Yongqi stated that it's not only due to the recovery in short-term downstream demand but also the叠加 of expectations for improved industry profitability. "The lithium salt prices have basically hit bottom now, and it's hard to predict how much they can rebound, but the improvement in the entire industry's performance is certain."
In a previous article on the Ti Media APP titled "Li-ion Battery Companies See Third-Quarter Losses Widen, as Lithium Prices Bottom Out and Continue to Fall | Industry Trend Indicator," it was mentioned, "As the prices of lithium concentrate and lithium salt converge, the high-priced raw materials that some listed companies had stockpiled in advance are fully absorbed, leading to a decrease in costs and a significant alleviation of the pressure from high-priced raw materials and impairment."
Take Tianqi Lithium Industry as an example, the company's net profit after tax was -3.897 billion yuan, -1.309 billion yuan, and -496 million yuan respectively in Q1, Q2, and Q3 of this year. Although the company continues to operate at a loss, the loss has narrowed significantly from quarter to quarter.
Tianqi Lithium Industry stated, "As the newly purchased low-cost lithium concentrate is gradually stored and the inventory of lithium concentrate is progressively depleted, the cost of chemical-grade lithium concentrate used in the production costs at the company's various bases is gradually approaching the new purchase price. The temporary misalignment in the pricing mechanism for lithium concentrate is also gradually diminishing, with the company's losses in the second and third quarters of 2024 achieving a sequential reduction."
Lithium futures and lithium mining stocks see a strong rebound; is the turning point here?
Xu Yongqi told Ti Media APP, "It's hard to determine whether this is a turning point, as there are no particularly clear signals yet from the perspective of the industry's cleanup; however, the current prices are very unfavorable to the industry. Logically speaking, with the recovery of downstream operation rates, the price of lithium salts is likely to reflect on demand and warm up."
Shanghai Steel Union believes that, on balance, the 11-month trading inventory is tight. As of now, the long-term agreement discounts for next year have not been finalized. Most lithium salt manufacturers have a strong willingness to hold prices. Coupled with robust downstream demand in November, it is estimated that lithium salt prices will remain volatile with a slight upward trend in the short term. Subsequently, it will be necessary to continue monitoring changes in the proportion of downstream supply.

Disclaimer: The content of this article is for reference, communication, and learning purposes only and does not constitute investment advice.
From TiMedia App, Author Su Qitao - Lithium Carbonate Futures and Lithium Ore Stocks Surge; Has the Turnaround Arrived? | Industry Trend Indicator - TiMedia Official Website