Supply-side adjustments from Australia and Africa each add 20,000 tonnes LCE, bringing the total supply increment to 400,000 tonnes.

On the demand side, new energy vehicle production and sales growth exceeds 10%, with domestic demand weak and incremental growth relying on exports; power battery lithium consumption grows at 10%, while energy storage cell growth reaches 70%, resulting in a demand increment of 420,000 tonnes.

Regarding inventory, Australian ore prices have fallen below USD 2,000 per tonne, yet integrated mining enterprises remain profitable; social inventories continue to decline.

Outlook: The fourth quarter will see a tight balance, with intensified long-short tug-of-war; supply and peak season will dominate, with price ranges of 115,000-143,000 or 126,000-168,000 yuan per tonne.

Supply Side: Multiple Disturbances in Overseas Mines

From the supply side, overseas mines face multiple disturbances. Australian mines including Mt Marion and Wodgina have raised production guidance, Greenbushes CGP3 and Ngungaju processing plants continue ramping up, Finiss and Bald Hill have resumed operations, and Australian lithium ore production has been revised up by 20,000 tonnes LCE; African lithium ore imports from Nigeria have grown rapidly, and Mali project capacity is gradually being released, with total African supply revised up by 20,000 tonnes LCE. The total supply increment stands at 400,000 tonnes.

On the demand side, new energy vehicle production and sales cumulative values for the first eight months have recovered to above 10%, but domestic consumption growth remains weak, with incremental growth entirely dependent on exports. Therefore, we maintain our full-year growth forecast of 10% for power battery lithium consumption. In energy storage, the global energy storage cell market continues its high prosperity, with leading energy storage cell manufacturers maintaining high capacity utilization rates, and energy storage cell shipment year-on-year growth maintained at 70%. The demand increment stands at 420,000 tonnes.

From the perspective of profit and inventory structure, Australian ore prices have fallen below USD 2,000 per tonne, but integrated mining enterprises still maintain good profitability. The industrial chain inventory structure is differentiated, with Guangzhou Futures Exchange warehouse receipts falling rapidly, representing a transfer of delivery warehouse inventory to downstream rather than a complete clearing of society-wide inventory.

Core View

Overall, September-October benefits from smelting production increases, with the supply-demand gap recovering month-on-month. The fourth quarter will maintain a tight balance pattern, but the gap size has contracted compared to mid-year, intensifying the long-short tug-of-war. Supply disturbances and the degree of downstream peak season realization will dominate fourth-quarter price movements. Based on different scenarios, we have estimated fourth-quarter battery-grade lithium carbonate futures prices: under the optimistic supply, pessimistic demand scenario (smooth mine shipments, high domestic smelting loads, energy storage orders below expectations), the dense price range is 115,000-143,000 yuan per tonne; under the pessimistic supply, optimistic demand scenario (South American salt lakes affected by weather disturbances, African shipments fluctuating, domestic mine resumption continuously delayed, concentrated release of year-end energy storage orders), the dense price range is 126,000-168,000 yuan per tonne.

01. Third Quarter 2026 Lithium Carbonate Market Review

1.1 Futures Price Trend: Center of Gravity Shifts Lower Under Weak Expectations

Third-quarter lithium carbonate futures exhibited a wide-range oscillation pattern of "bottoming in July, valuation repair rebound in August, and surge-then-pullback in September," with the main contract trading range of 124,000-163,000 yuan per tonne. July was pressured by expectations of loose forward supply, with production cuts from lithium salt plant maintenance providing only pulse support; August saw a repair rally driven by lithium ore constraints, rising energy storage and battery scheduling, and peak season stocking expectations; September was disturbed by inventory caliber adjustments and downstream scheduling downgrades, weakening the previous bullish logic, with prices rapidly pulling back. Meanwhile, after concentrated cancellation of warehouse receipts in July, rapid accumulation suppressed rebound space, but from mid-September, warehouse receipts declined rapidly, and spot premiums rose significantly, providing strong support to the futures market. Overall, under the influence of both bulls and bears, the center of gravity shifted lower.

1.2 Spot Market: Rapid Decline in Warehouse Receipts, Year-on-Year Basis Repair

Third-quarter lithium carbonate spot prices followed futures movements, with battery-grade lithium carbonate spot prices fluctuating in the range of 132,200-165,250 yuan per tonne, currently oscillating around 134,300 yuan per tonne; industrial-grade lithium carbonate spot prices fluctuated in the range of 128,200-161,250 yuan per tonne, currently oscillating around 130,750 yuan per tonne. Current lithium carbonate spot prices are at low levels, and approaching the Mid-Autumn and National Day holidays, downstream cathode and battery enterprises have significantly increased pre-holiday stocking activity. Guangzhou Futures Exchange lithium carbonate warehouse receipts, after a round of concentrated cancellation in July, rapidly accumulated again, peaking near 50,000 tonnes, with visible delivery inventory rising and putting pressure on the futures market. Entering September, driven by downstream low-price restocking, large quantities of warehouse receipt goods flowed out of delivery warehouses, with warehouse receipts experiencing continuous and significant declines, significantly easing selling pressure from warehouse receipts. Spot circulating goods shifted from the futures delivery segment to the mid-to-downstream industrial chain, with basis simultaneously repairing, and premiums for various brands rising significantly. The industrial-grade spread once rose to 5,000 yuan per tonne, currently falling back to around 4,000 yuan per tonne.

02. Fundamentals: Global Supply and Demand Analysis

2.1 Overseas Mines: Australian and African Production Revised Up

Mine quarterly report data shows that in Q2 2026, production from mainstream Australian lithium mines rose overall quarter-on-quarter. Greenbushes produced 387,000 tonnes of lithium concentrate, with the CGP3 production line continuing to ramp up, contributing 33,000 tonnes in Q1 2026 and 71,000 tonnes in Q2 from the modified line, the largest incremental source in Q2 this year, with cash costs of only AUD 448 per tonne, demonstrating significant cost advantages; Pilgangoora produced 214,300 tonnes, with the Ngungaju processing plant restarted this quarter, cash costs of AUD 616 per tonne, and as Ngungaju enters a stable ramp-up cycle, costs are expected to fall to AUD 575-625 per tonne after scale effects are realized; Mt Marion produced 130,000 tonnes, with cash costs as high as AUD 878 per tonne, under pressure in the lithium concentrate price downtrend; Wodgina produced 167,000 tonnes, with cash costs of AUD 714 per tonne; Kathleen Valley produced 86,000 tonnes, with cash costs of AUD 987 per tonne, classified as a high-cost Australian lithium mine. Finiss commenced mining in Q2 this year, with first shipment expected to complete in Q4; Bald Hill restarted operations in May, expected to reach full capacity by year-end, contributing partial increments in Q3 and Q4. Currently, absent energy crises triggered by geopolitical factors, mine production is generally increasing normally.

South American mines and salt lakes: Q2 South American salt lake production rose steadily overall. Chile's Atacama Salt Lake SQM produced 75,800 tonnes LCE in Q2, Albemarle's Chile salt lake produced 31,200 tonnes LCE, with total Chilean salt lake production at approximately 107,000 tonnes LCE; Argentina, constrained by infrastructure limitations, saw slow ramp-up of new projects, with industry-wide Q2 salt lake production at approximately 27,500 tonnes LCE. The Cauchari-Olaroz project produced 9,280 tonnes of lithium carbonate in Q2, with planned maintenance in May. On exports, Chile's total lithium carbonate exports in Q2 were 70,200 tonnes, down approximately 8,000 tonnes quarter-on-quarter, with May exports showing significant month-on-month decline; Argentina's Q2 lithium carbonate exports were approximately 28,200 tonnes, mostly destined for China. In July and August, Chile exported 23,364 tonnes and 24,082 tonnes of lithium carbonate respectively, with export levels significantly recovering from Q2.

African lithium mines: China Molybdenum's Bikita project continued mining and ore processing in Q2, producing approximately 115,000 physical tonnes of lithium concentrate (5.5% Li₂O) in Q2, with first-half total lithium concentrate at 300,000 physical tonnes, Q2 accounting for nearly 40%; Huayou Cobalt's Arcadia processing line operated stably, with Q2 lithium concentrate output of approximately 82,000 physical tonnes; the supporting lithium sulfate production line completed commissioning in April, with small quantities of lithium sulfate products beginning at Q2 end, the first commercial lithium sulfate line in the region. In February, Zimbabwe temporarily suspended lithium concentrate export approvals. Chinese-funded enterprise mining projects all maintained normal production, but constrained by export policies, large quantities of concentrate accumulated as mine inventory, with logistics and port congestion further suppressing shipment pace. Q2 arrivals to China were significantly lower than mine production, with most cargo flows deferred to concentrated Q3 shipments.

Mali's two projects: Ganfeng Lithium's Goulamina project continued processing plant ramp-up in Q2, with Q2 lithium concentrate output of 107,000 physical tonnes; constrained by rainy season and power disturbances, capacity utilization was 70-75%, not yet reaching Phase 1 full capacity of 506,000 tonnes per year; Hainan Mining's Bougouni project maintained low-load operation of the DMS dense medium line in Q2, with Q2 concentrate output of only 21,000 physical tonnes due to rainy season equipment maintenance; the flotation Phase 2 project remains under construction, with no new capacity released in Q2. Zijin Mining's Manono project north mining area in DRC was in continuous ramp-up in Q2, with Q2 lithium concentrate output of approximately 44,000 physical tonnes; constrained by power supply and processing equipment commissioning, capacity release progress was slower than previously planned, not yet entering large-scale volume release. Due to weak local infrastructure and high transportation costs, Q2 exports were mainly long-term contract supplies, with limited spot circulation.

2.2 China Lithium Resources: Slow Release of New Domestic Capacity

Domestic lithium carbonate smelting capacity continues to increase. On spodumene: Guocheng Lithium's Phase 1 60,000-tonne lithium carbonate production line officially commenced production in Q2 this year, with Q3 in capacity ramp-up. Qualified battery-grade lithium carbonate was produced in May, but affected by external lithium concentrate cost fluctuations, the facility did not immediately reach full load, with a 2026 target output of approximately 30,000 tonnes of lithium carbonate. On mica: Dazhong Mining's Jijiaoshan project in Linwu, Hunan has obtained mining licenses, environmental impact assessments, and tailings pond approvals, with ore processing and lithium salt production line equipment installation basically complete, planned for trial production in Q4 2026. New mine personnel commissioning and tailings system integration will result in a long ramp-up cycle after production, with limited output contribution within 2026. On salt lakes: Zangge Mining's Mamucuo salt lake project completed construction and entered trial production in Q3, with small-scale output, not yet large-scale volume release. Due to plateau environment, temperature, and brine concentration fluctuations, ramp-up speed is slow, with a 2026 target of only 20,000-25,000 tonnes, and large-scale volume release deferred. As of September this year, total lithium carbonate smelting capacity stands at 178,200 tonnes. Among this, spodumene monthly smelting capacity increased to 100,500 tonnes, accounting for 56.4%; mica smelting capacity at 44,900 tonnes, accounting for 25.20%; salt lake smelting capacity at 32,800 tonnes, accounting for 18.41%.

2.3 New Energy Vehicles: Domestic Sales Growth Slows, Overseas Particularly Europe Accelerates

Benchmark data shows that in July 2026, global new energy vehicle sales were approximately 1.85 million units, up 9% year-on-year, with January-July global cumulative sales at approximately 11.5 million units. By region, Europe showed strong growth momentum, up 33% year-on-year in July; major markets including Germany, the UK, and France continued to recover, with France's monthly new energy vehicle sales up 81% year-on-year. In contrast, China's market saw domestic new energy demand growth slow after subsidy and tax policy adjustments, while North America continued to be affected by the exit of US federal electric vehicle tax credits. Benchmark noted that August global pure electric and plug-in hybrid vehicle sales continued year-on-year growth, maintaining growth for the sixth consecutive month, but the real driver of this round of growth is no longer China or North America, but Europe. Reuters released related data, noting that the European market is becoming the most important growth engine for global new energy vehicle sales, relying on subsidy recovery, expanded product supply, and fuel price changes.

In August 2026, new energy vehicle production and sales reached 1.653 million and 1.643 million units respectively, up 18.9% and 17.8% year-on-year. January-August, new energy vehicle production and sales reached 10.668 million and 10.65 million units respectively, up 10.8% and 10.7% year-on-year. Among this, August domestic new energy vehicle sales were 1.118 million units, up 10.9% month-on-month and down 4.6% year-on-year. January-August, domestic new energy vehicle sales were 7.215 million units, down 10.8% year-on-year. August new energy vehicle exports were 526,000 units, down 5% month-on-month and up 1.3 times year-on-year. January-August, new energy vehicle exports were 3.435 million units, up 1.2 times year-on-year.

2.4 Batteries: Battery Production Maintains High Growth, Power and Energy Storage Growth Divergence Clear

According to Xinchun Information data, July 2026 global lithium battery total production was 292.4 GWh, up 56.7% year-on-year; global energy storage battery production was 103.5 GWh, up 98.1% year-on-year, with January-July global energy storage battery cumulative production at 613.11 GWh. According to SNE Research data, January-July 2026 global power battery installations were 725.2 GWh, up 20.4% year-on-year. Overseas market installations were 316.2 GWh, up 25.8% year-on-year, faster than domestic by 9.2 percentage points; overseas installations accounted for 43.6%, up 1.9 percentage points year-on-year; domestic market installations were 409.0 GWh, up 16.6% year-on-year.

03. Lithium Carbonate Fundamentals: Domestic Supply and Demand Analysis

3.1 Lithium Ore: Zimbabwe Lithium Ore Exports Normalize, Lithium Ore Port Inventory Stops Falling and Rebounds

Third-quarter lithium ore prices ran high in July before oscillating lower, stabilized in mid-to-late August, and began continuous accelerated declines in September. The center of gravity for lithium ore prices shifted down significantly throughout Q3, with lithium concentrate spot weakening, consistent with the downward logic of lithium carbonate prices. Specifically, July saw ore prices reach highs, with Australian spodumene CIF reaching a maximum of USD 2,330 per tonne; domestic 5.0-5.5% spodumene spot peaked at 15,900 yuan per tonne; high-grade mica concentrate 2.0-2.5% peaked at 5,100 yuan per tonne. After departing from highs, ore prices entered a downtrend, with August seeing overall high-level pullback but with a relatively mild pace and repeated oscillations. Entering September, downstream industrial chain raw material procurement shifted to just-in-time needs, unwilling to lock in ore at high prices, and all categories of lithium concentrate began rapid declines. As of September 20, Australian spodumene CIF had fallen to USD 1,900 per tonne, domestic spodumene 5.0-5.5% grade declined to 10,975 yuan per tonne, and mica concentrate 2.0-2.5% fell to 3,650 yuan per tonne.

According to General Administration of Customs data, August China lithium spodumene imports were 906,600 tonnes, up 22.6% month-on-month. Among this, imports from South Africa were 223,000 tonnes of lithium spodumene raw ore, up 104.6% month-on-month. Lithium concentrate imports from Australia were 326,000 tonnes, down 5.4% month-on-month and up 54.2% year-on-year; imports from Zimbabwe were 75,000 tonnes, up 245.0% month-on-month; imports from Nigeria were 135,000 tonnes, up 29.4% month-on-month. January-August China lithium spodumene imports were 6.08 million tonnes, up 25.0% year-on-year. Among this, imports from Australia were 2.627 million tonnes, up 7.5% year-on-year; from South Africa 1.115 million tonnes, from Zimbabwe 570,000 tonnes, from Nigeria 846,000 tonnes, from Mali 407,000 tonnes. From port inventory data, Zimbabwe lithium ore exports were restricted starting in March, corresponding to continuous declines in domestic port inventory, reaching a low point in mid-to-late July; in May, as Yahua Group and other domestic enterprises completed export procedures and began shipments, domestic lithium ore inventory began rebounding from lows in late July. As of now, Zimbabwe-related enterprise lithium ore shipments have fully returned to normal levels. Current domestic lithium ore port inventory has recovered to mid-May levels, and domestic spodumene smelting operating rates have significantly recovered.

3.2 Lithium Carbonate: Raw Material Supply Recovery, Spodumene Smelting Stops Falling and Rebounds

According to SMM data, August domestic lithium carbonate total production was 112,330 tonnes, up 7% month-on-month and up 31.78% year-on-year. January-August domestic lithium carbonate cumulative production was 843,800 tonnes, up 41.49% year-on-year. Among this, spodumene-produced lithium carbonate was 489,200 tonnes, accounting for 57.98% of total production, up 51.40% year-on-year; mica-produced lithium carbonate was 107,200 tonnes, accounting for 12.7% of total production, down 17.29% year-on-year; salt lake lithium extraction was 152,500 tonnes, accounting for 18.08% of total production, up 66.43% year-on-year; recycling was 94,800 tonnes, accounting for 11.24% of total production, up 83.40% year-on-year.

According to China Customs data, August China imported 30,391 tonnes of lithium carbonate, up 14% month-on-month and up 39% year-on-year. Among this, imports from Chile were 19,950 tonnes, accounting for 66% of total imports; from Argentina 8,719 tonnes, accounting for 29%; from Indonesia 1,040 tonnes, accounting for 3%. January-August China cumulative lithium carbonate imports were 236,000 tonnes, up 54% year-on-year. August China exported 260 tonnes of lithium carbonate, up 23% month-on-month and down 30% year-on-year. January-August China cumulative lithium carbonate exports were 2,820 tonnes, down 12% year-on-year. August China imported 8,785 tonnes of lithium sulfate, down 46% month-on-month and down 9% year-on-year. January-August China cumulative lithium sulfate imports were 109,600 tonnes, up 72% year-on-year. Among this, imports from Chile were 8,344 tonnes, from Zimbabwe 441 tonnes.

3.3 Downstream Consumption: Cathode Materials and Electrolyte Lithium Hexafluorophosphate Production

August China ternary material production was 91,090 tonnes, up 2.1% month-on-month and up 24% year-on-year. January-August China ternary material cumulative production was 673,300 tonnes, up 36.25% year-on-year; August China lithium iron phosphate production was 579,700 tonnes, up 7.9% month-on-month and up 83% year-on-year. January-August China lithium iron phosphate cumulative production was 3.7468 million tonnes, up 72% year-on-year; August lithium cobalt oxide production was 7,010 tonnes, down 1.68% month-on-month and down 43.24% year-on-year. January-August lithium cobalt oxide cumulative production was 63,300 tonnes, down 13.4% year-on-year; August China lithium manganese oxide production was 10,687 tonnes, down 1% month-on-month and down 5% year-on-year. January-August China lithium manganese oxide cumulative production was 85,700 tonnes, down 8.2% year-on-year; August national lithium hexafluorophosphate production was 34,320 tonnes, up 3.2% month-on-month and up 64.9% year-on-year. January-August national lithium hexafluorophosphate cumulative production was 234,200 tonnes, up 52.55% year-on-year.

04. Inventory and Supply-Demand Balance

4.1 Inventory Analysis: Differentiated Performance in Industrial Chain Inventory Changes

In Q3, from the terminal perspective, domestic new energy vehicle channel inventory rose overall, with traditional "Golden September" peak season sales realization below earlier optimistic expectations, weak terminal movement, and increased dealer inventory pressure. Currently, mainstream brand channel inventory turnover is 28-38 days, significantly up from 22-26 days in Q2; some niche brands have inventory exceeding 45 days. Among this, lithium iron phosphate models circulate faster with lower inventory; high-end ternary models destock more slowly, with more obvious channel inventory accumulation. Automakers focused on controlling production schedules and increasing promotions to clear inventory, without proactively restocking upstream industrial chain. Transmitted to the battery end, battery manufacturers cautiously controlled finished cell inventory. On batteries, power and energy storage battery production maintained high levels, but affected by weak vehicle terminal movement, cell manufacturer finished inventory accumulated slightly quarter-on-quarter; mainstream large manufacturer finished cell turnover is 22-28 days. Energy storage battery orders are decent, with energy storage cell inventory maintained at low levels; power cells, especially ternary cells, saw slower destocking pace. According to SMM data, as of end-August, domestic power lithium battery inventory was 195 GWh, of which ternary battery inventory was 59.08 GWh, lithium iron phosphate battery inventory was 136.66 GWh; energy storage battery inventory was 32 GWh. From the inventory-to-sales ratio perspective, the power cell inventory-to-sales ratio is still declining, while the energy storage ratio has rebounded.

On cathode materials, finished product inventory: ternary material finished product inventory turnover is 7-7.5 days, in the neutral-to-low range, with August production showing high year-on-year growth; on the raw material side, lithium carbonate inventory continues to destock. From weekly data, total inventory is 70,700 tonnes, of which smelters 7,100 tonnes, downstream 34,800 tonnes, other samples 28,800 tonnes; September new statistical caliber weekly total inventory is 158,300 tonnes, of which upstream 33,700 tonnes, cathode plants 43,900 tonnes, traders 61,500 tonnes, cell plants and others 19,200 tonnes.

4.2 Global Supply and Demand

On the supply side, according to relevant enterprise financial reports, Q2 Australian mainstream lithium mine production rose overall quarter-on-quarter. Greenbushes' CGP3 production line continued ramping up, contributing significant increments in Q2; Pilbara's Ngungaju processing plant restarted; Finiss commenced mining in Q2, expected to complete first shipment in Q4; Bald Hill restarted operations in May, expected to reach full capacity by year-end, contributing partial increments in Q3 and Q4. Therefore, we have revised up Australian lithium mine production by 20,000 tonnes LCE. On Africa, from the first eight months of import data, we see that Nigeria lithium ore imports have grown rapidly; Mali project capacity is gradually being released, with increased volumes returning to China; although Zimbabwe's exports were restricted from March to July, production was unaffected, converting to inventory. Therefore, we have revised up total African supply by 20,000 tonnes LCE. On the consumption side, new energy vehicle production and sales data for the first seven months showed year-on-year growth recovering to 9%, maintaining full-year power lithium consumption year-on-year growth at 10% without adjustment; on energy storage, the global energy storage cell market continues its high prosperity, with leading energy storage cell manufacturers maintaining high capacity utilization rates, maintaining the 70% forecast for energy storage lithium consumption unchanged.

4.3 Domestic Supply and Demand

In Q3, on production: due to spodumene supply tightness, combined with delayed resumption of Jiangxi mica mines, some domestic lithium salt plants proactively reduced loads for maintenance in July, with total production declining, resuming production from August. September-December domestic smelting capacity continues to be released, with monthly total production rising step by step from 110,000 tonnes to the 120,000-130,000 tonne range; on imports and exports: monthly net imports maintained at 250,000-370,000 tonnes, with overseas lithium salt, lithium sulfate, and lithium concentrate converted import supply forming stable supplementation, with monthly total lithium carbonate supply basically maintained at 130,000-162,000 tonnes. On consumption: July and August affected by battery consumption tax policy, some lithium battery consumption was front-loaded; entering September consumption peak season, downstream scheduling remained strong. According to Dadong Times data, September cell scheduling increased 9.2% month-on-month, October cell scheduling increased 3.9% month-on-month. From the current situation, downstream cell scheduling month-on-month growth has slowed, and November-December cell scheduling growth is likely to continue declining. Overall supply and demand: July-August, due to supply-side contraction and demand front-loading, monthly apparent supply-demand gap reached year-highs, with the largest inventory consumption intensity; September-October, with futures running at low levels, downstream restocking enthusiasm was high, combined with dual-holiday stocking, lithium battery demand maintained high levels, but domestic production increases drove gap recovery month-on-month; year-end November-December lithium battery scheduling declines, with supply-demand gap further narrowing. From the full-year monthly supply-demand situation, Q1 supply-demand was relatively loose, mid-year supply-demand was tight, and Q4 tight balance pattern has somewhat eased.

Several uncertainties exist in Q4 supply-demand: Zimbabwe lithium ore export policy, currently clear that from January 1, 2027, lithium concentrate exports will be officially banned, with only deep-processed products such as lithium sulfate allowed for external export. In Q4, compliant mining enterprises will apply for export quotas as much as possible, accelerating shipment of accumulated mine inventory. But currently only a few projects have lithium sulfate production lines operational, with most mines' supporting lithium sulfate facilities still under construction. It is possible the market may trade ahead of the expected decline in Zimbabwe's overall export volume in 2027; El Niño impact, South America especially Chile rainfall may increase, evaporation time will thus lengthen, further affecting lithium salt supply, with actual affected time expected from November to March next year; whether domestic large-scale energy storage negotiations can effectively conclude to break the current price deadlock on the consumption side. If cell prices rise, energy storage orders may see another pulse before year-end; Jianxiawo mine resumption, currently the mine has restarted environmental impact assessment approval procedures, with market generally expecting the mine's resumption time to extend to next year. If there is news of earlier resumption, sentiment may impact the futures market.

05. Summary and Outlook

From the supply side, overseas mines face multiple disturbances. Australian mines including Mt Marion and Wodgina have raised production guidance, Greenbushes CGP3 and Ngungaju processing plants continue ramping up, Finiss and Bald Hill have resumed operations, and Australian lithium ore production has been revised up by 20,000 tonnes LCE; African lithium ore imports from Nigeria have grown rapidly, and Mali project capacity is gradually being released, with total African supply revised up by 20,000 tonnes LCE. Full-year total production increased by 400,000 tonnes compared to last year.

New energy vehicle production and sales cumulative values for the first eight months have recovered to above 10%, but domestic consumption growth remains weak, with incremental growth entirely dependent on exports. Therefore, we maintain our full-year growth forecast of 10% for power battery lithium consumption. In energy storage, the global energy storage cell market continues its high prosperity, with leading energy storage cell manufacturers maintaining high capacity utilization rates, and energy storage cell shipment year-on-year growth maintained at 70%. The demand increment stands at 420,000 tonnes.

The core variable for Q4 demand lies in the conclusion of domestic large-scale energy storage commercial negotiations. If the price deadlock is broken, year-end energy storage orders are expected to see pulse-style release, and adjustments will be made at that time.

From the perspective of profit and inventory structure, Australian ore prices have fallen below USD 2,000 per tonne, but integrated mining enterprises still maintain good profitability; external spodumene smelting enterprises, suppressed by high lithium ore prices, continue to operate at a loss in the smelting segment. The industrial chain inventory structure is differentiated, with Guangzhou Futures Exchange warehouse receipts falling rapidly, representing a transfer of delivery warehouse inventory to downstream rather than a complete clearing of society-wide inventory; automaker channels and some cell finished product inventory have accumulated, smelter inventory pressure is not high, downstream in-plant inventory has risen, and the destocking pace after restocking completion needs to be tracked.

Overall, September-October benefits from smelting production increases, with the supply-demand gap recovering month-on-month. The fourth quarter will maintain a tight balance pattern, but the gap size has contracted compared to mid-year, intensifying the long-short tug-of-war. Supply disturbances and the degree of downstream peak season realization will dominate fourth-quarter price movements. Based on different scenarios, we have estimated fourth-quarter battery-grade lithium carbonate futures prices: under the optimistic supply, pessimistic demand scenario (smooth mine shipments, high domestic smelting loads, energy storage orders below expectations), the dense price range is 115,000-143,000 yuan per tonne; under the pessimistic supply, optimistic demand scenario (South American salt lakes affected by weather disturbances, African shipments fluctuating, domestic mine resumption continuously delayed, concentrated release of year-end energy storage orders), the dense price range is 126,000-168,000 yuan per tonne.