Chinese lithium plunges 8.4% in a day as futures fall below 90,000 yuan

China’s most-active lithium carbonate futures contract closed at 88,360 yuan per tonne on October 29, down 8.4% on the day and 6.18% on the week, breaking the 90,000-yuan level, according to SMM. In spot, battery-grade carbonate reached 100,050 yuan on Wednesday but fell 3,950 yuan on Thursday, ending the week at an average 96,100 yuan (−0.9%).

On supply, Chinese lithium carbonate output kept rising, driven by imported spodumene and new lines. According to SMM, refiners mainly deliver long-term contracts and are building stock, while cathode and battery makers cut orders, buy only what they need and bid low. Total inventory fell 1,894 tonnes to 128,385, but the pace of decline slowed and smelter stocks rose.

The day before, Huatai Futures reported weekly output of 26,375 tonnes (+845 t), with spodumene accounting for 14,967 tonnes, and projected weaker downstream production schedules for November. SMM expects the contract to trade between 80,000 and 105,000 yuan the following week and says the weak trend is unlikely to reverse in the short term.

CSP take: for buyers of LFP batteries and storage systems, the fall opens room to renegotiate, but swings of more than 10% within days call for contracts with adjustments tied to an index such as SMM’s. This reading is ours, not the sources’.