First Capital Futures: Downstream low-price demand stocking, Lithium Carbonate 2605 contract surged over 5% intraday in the early trading session.

In the early trading session today, the main contract for lithium carbonate opened relatively strong and rose above 144,500 yuan/ton, with an increase of over 5% at one point. On the cost side, overseas spodumene prices declined along with lithium carbonate prices, pushing down cost support. On the supply side, expectations for the resumption of spodumene mining have been delayed, and before the Spring Festival and during the holiday, lithium salt factories may undergo maintenance, narrowing supply expectations. Chile’s exports of lithium carbonate to China increased month-on-month, and the resumption of lithium mining in Brazil has somewhat alleviated production cuts. Previously, downstream inventory was sufficient, and as the Spring Festival approaches, inventory buildup is gradually coming to an end, with the rate of destocking slowing down, making it difficult for demand to support prices to break through. On the inventory side, domestic lithium salt factory stocks in January were about 29,800 tons, an increase of 5,900 tons from the previous month, up 24.69% month-on-month and 8.01% year-on-year. Downstream buyers continue to stock at low prices, and yesterday, spot lithium carbonate prices increased by 500 yuan/ton. Last week’s decline in precious metals led to a cooling of market sentiment for the main contracts, resulting in a correction in the market. The fundamentals remain weak on both supply and demand, with a slowdown in destocking, but today’s main contracts halted their decline and rebounded. There are no upward drivers before the festival, and main contracts are mainly fluctuating. It is advisable to observe and consider closing positions to avoid risk during the holiday. (First Capital Futures)