Chinese lithium carbonate inventories continue their fall...now less than 3 weeks of supply, even for the restated series...In my view it's only a matter of time til prices bounce...

This quarter's Battery Materials Review breaks down the inventory build in the battery chain in more detail and is available to our Patreon Silver and Gold members patreon.com/cw/rockstockchan…

When I talk about price manipulation in lithium, I'm not talking about some nefarious state actor. I'm talking about companies. Behold the situation on GFEX at the moment. Lithium carbonate inventories in the market have been falling for all this year...GFEX inventories going in the opposite direction, producing an impression of oversupply that is simply not true...that's manipulation!

I've not really bought into the China lithium price manipulation narrative up to now, but I'm afraid it's becoming increasingly hard to deny it. The price/inventory relationship has been one of the constants during my 25 years as a materials analyst. When it breaks down, there has to be something very big happening in a market. It's broken down in copper over the past 18 months and it's now broken down in lithium over the past several. In copper, I can understand the move because of the perception that copper is entering structural scarcity - even if I don't agree with that narrative. In lithium, I can't understand the move. Through all of the other situations when Western commentators have cried "price manipulation" in lithium, the price/inventory ratio has held true. But it's not happening now. How you can have a situation where inventories are falling to only weeks of supply but still have prices falling, even gapping down by over 10% earlier this week, defies belief. I understand that some Chinese analysts believe that the market will go into surplus next year. Some Western analysts believe that as well. But they're not calling for decade-long surpluses, like copper analysts are calling for decade-long deficits. That is not enough to justify current price action, in my view.

@usuallyYJLee joins us for this week's Rock Stock Recap. Check it out!

Noting that SMM's China lithium inventories resumed their fall this week after a brief (2 week) build ahead of Golden Week holidays. The main series is now at its lowest level in absolute terms since May 2023 and the new series is down 35Kt (20%) since end-August...

Lots of questions about the negative GS piece on lithium. While GS' supply forecasting has been some of the best in the space, its medium- to longer-term demand forecasts have been structurally low. Hence they're regularly forecasting a surplus market when one may not occur...

Chinese EV sales growth and ESS installation growth has been negative this year. Not a great look for the world's most important battery market. But I believe that China is past the worst now and that could have big implications for #Lithium demand and prices in Q4/26 and into 2027