【SMM Analysis】Fluctuations! A Complete Analysis of China's Lithium Market in 2024 (Part 1)

Last night, LME copper opened at $9,120/mt.

Yesterday, LME copper was closed due to the UK summer bank holiday. Overnight, the most-traded SHFE copper 2410 contract opened at 74,850 yuan/mt, initially reaching a high of 75,070 yuan/mt, then narrowly fluctuated downward, hitting a low of 74,690 yuan/mt near the end of the session, and finally rebounded to close at 74,960 yuan/mt, up 0.83%. Trading volume reached 34,000 lots, and open interest reached 160,000 lots. Macro side, the eastern Libyan government announced the cessation of all oil production and exports, causing international oil prices to surge, which in turn pushed copper prices up. Additionally, US Fed's Daly stated that it is appropriate to start cutting interest rates now, but it is too early to determine the extent of the cuts. Fundamentally, a large amount of imported copper flowed into domestic trade over the weekend, increasing the supply of copper cathode in the spot market, causing premiums to fall under pressure. On the consumption side, as copper prices rose, downstream buyers were hesitant to purchase, leading to inactive procurement. As of Monday, August 26, SMM national copper stocks in major regions slightly decreased by 100 mt from last Thursday to 283,400 mt, continuing the destocking trend, but the decline significantly slowed down. Total stocks were still 206,000 mt higher YoY compared to 77,400 mt last year. In terms of prices, copper prices are expected to have some upward potential.

SMM data shows high iron ore shipment volumes in March, driven by mines aiming to hit quarterly targets and two additional working days compared to February. Considering these elements, March likely saw a MoM rise in iron ore import volumes. As April ushers in peak demand season and steel mills ramp up, pig iron output is set to grow, boosting iron ore demand.

In 2023, Stellantis net revenue reached 189.5 billion euros, a year-on-year increase of 6%, net profit reached 18.6 billion euros, a year-on-year increase of 11%, and industrial free cash flow increased by 19% year-on-year to 12.9 billion euros.

Beteray: Achieved revenue of 251.19 billion yuan and a net profit attributable to shareholders of 1.651 billion yuan in 2023

Lithium carbonate dropped by 81.07%.

MM data shows pure nickel stocks in Shanghai bonded zone decreased by 400 mt WoW last week, standing at 4,500 mt, including 1,720 mt of nickel briquette and 2,780 mt of nickel plate.

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Goldman Sachs' latest view is that commodity prices are expected to rise in 2024 as the Fed's weakening hawkish stance and reduced risks of economic recession will boost demand. Goldman Sachs expects oil prices to remain in the range of $80-100 per barrel, with Brent crude oil averaging $92 per barrel in 2024. We are also optimistic about copper and aluminum, with the average copper price expected to be $9,200/mt in 2024.

Overnight, LME zinc closed at $2,374/mt, up $4/mt or 0.17%. Trading volume decreased to 5,413 lots, and open interest fell 323 lots to 181,000 lots.  LME zinc inventory decreased by 425 mt to 77,825 mt, a drop of 0.54%. Overnight, the Fed's hawkish remarks put pressure on LME zinc prices.