CITIC Securities: Inventory continues to be destocked, demand is gradually increasing, and lithium prices are easy to rise but hard to fall

Text｜Wang Jiechao, Guo Yanzhe, Shao Sancai

Lithium: According to SMM, domestic lithium carbonate inventories continue to decline, with the rate slightly slowing. This week, inventories decreased by 414 tons, totaling less than 99,000 tons. Smelting plant inventories fell by 1,184 tons to 16,000 tons, reaching the lowest level in nearly three years. Downstream inventories decreased by 1,890 tons to 46,000 tons, with estimated available inventory days less than 10. Other segment inventories declined by 1,120 tons to 37,000 tons, remaining relatively low. On the supply side, weekly lithium carbonate production increased by 768 tons, but considering disruptions from Zimbabwe’s halted exports and port ore stock levels, future supply elasticity is expected to be limited. Demand continues to recover, with energy storage and heavy-duty truck demand remaining strong. Power battery consumption is gradually entering peak season. Coupled with the Middle East war, overseas energy pressures are highlighted, and European household storage demand is rising. Over the next quarter, low inventory remains the core contradiction; lithium prices are more likely to rise than fall.

Lithium: According to Baichuan Yingfu, the average market price for industrial-grade lithium carbonate this week is 155,000 yuan/ton, up 2.0% from last week; battery-grade lithium carbonate averages 158,000 yuan/ton, up 1.9%. On the supply side, weekly lithium carbonate output is expected to increase month-on-month, supported by production resumption and ramp-up of domestic producers. In terms of imports, Chile exported 22,380 tons of lithium carbonate to China in February, and overseas supply is expected to increase this month. Industry-wide inventories remain low and continue to decrease. Lithium salt producers actively ship goods, operating at low inventory levels; traders are eager to receive goods after the holiday, but overall inventory increase is small; downstream material manufacturers maintain safety stocks, with some replenishing due to urgent demand, leading to a relative increase in inventory levels within the month. Futures warehouse receipts continue to decline this week, with 36,739 tons on the previous trading day and warehouse receipts being canceled at month-end. Demand-wise, lithium carbonate market gradually improves in March, with steady recovery in power battery demand. Coupled with sustained efforts in energy storage, overall downstream market activity increases. Rumors of order cancellations circulated this week but have not been confirmed or caused actual impact; downstream demand remains high. The export tax rebate policy adjustment continues to stimulate exports, with some companies accelerating production to fulfill overseas orders. Downstream material manufacturers maintain just-in-time procurement, with some large firms actively replenishing stocks, showing resilience in demand. On the resource side, domestic lithium resource independence and control are increasingly significant.

Nickel: This week, LME nickel prices are $17,320/ton, down 0.7% from last week; SHFE nickel prices are 136,930 yuan/ton, down 0.2%. Weekly SHFE nickel inventories are 63,700 tons; LME nickel inventories are 284,700 tons; total inventories are 348,300 tons, down 0.3% from last week. On the supply side, domestic nickel sulfate production is estimated at 45,920 tons this week, increased from last week, with production capacity ramping up. Domestic nickel sulfate supply was affected by Indonesia’s wet-process production halt, leading to tight MHP raw material arrivals. Leading companies maintain normal operations, while some small and medium enterprises operate at lower capacity due to raw material and cost pressures. Overall industry output growth is limited. On the demand side, demand for battery-grade nickel sulfate is weak; downstream precursor companies mainly digest inventories and replenish stocks as needed, with low willingness to purchase at high prices. Electroplating-grade nickel sulfate market demand remains stable; traditional hardware orders are weak, with only high-end precision electroplating requiring on-demand procurement; overall, no significant increase.

Rare Earths & Magnetic Materials: Prices declined this week. As of Thursday, the average price of praseodymium-neodymium oxide is 785,000 yuan/ton, down 7.37% from last Friday; dysprosium oxide averages 1,450,000 yuan/ton, down 3.97%; terbium oxide averages 6,255,000 yuan/ton, down 1.11%. From supply and demand fundamentals, supply remains tight; separation enterprises have limited capacity increases, upstream ore shipments are difficult, and production capacity is hard to expand. Waste material production is stable; upstream checks are ongoing, with companies maintaining steady production and limited large output. Long-term industrial contracts are stable, and spot circulation is limited. Demand expectations improve; neodymium-iron-boron companies operate steadily, with stable orders and expected incremental growth for the year. Downstream magnetic material companies are gradually purchasing, and market demand remains primarily driven by necessity.

1. The global economy is experiencing significant recession, with consumption collapsing. The World Bank’s latest “Global Economic Outlook” lowered the 2025 global growth forecast from 2.7% in January to 2.3%, with nearly 70% of economies experiencing downward revisions. The World Bank states that global economic growth is slowing due to trade barriers and uncertain global policy environments. Compared to six months ago, when a “soft landing” seemed possible, the current situation indicates renewed turmoil. If the trajectory is not corrected promptly, living standards could be severely impacted. Economic data shows a downward trend, and a deep recession would significantly impact nonferrous metal consumption.

2. U.S. inflation is out of control, the Federal Reserve’s monetary tightening exceeds expectations, and a strong dollar suppresses equity asset prices. The U.S. cannot effectively control inflation, continuing to raise interest rates. The Fed has implemented substantial consecutive rate hikes, but services—especially rent and wages—remain sticky, restraining inflation decline. If the Fed maintains high-intensity rate hikes, it will be unfavorable for nonferrous metals priced in dollars.

3. Domestic new energy sector consumption growth is below expectations, and the real estate sector remains sluggish. Although policies for real estate sales have been relaxed to some extent, residents’ willingness to buy remains weak, and debt resolution for real estate companies is progressing poorly. If sales do not improve, there is a risk of stalled construction in the future, which could negatively impact consumption of certain nonferrous metals domestically.

Research Report Title: “Inventory Depletion Continues, Demand Gradually Rises, Lithium Prices More Likely to Rise than Fall”

Release Date: March 15, 2026

Published by: CITIC Construction Investment Securities Co., Ltd.

Report Analysts:

Wang Jiechao SAC No.: S1440521110005

Guo Yanzhe SAC No.: S1440524010001

Shao Sancai SAC No.: S1440524070004