CITIC Construction Investment: Inventory remains in a state of digestion, demand is gradually increasing, and lithium prices are more likely to rise than fall.

CITIC Securities pointed out that, according to SMM, domestic lithium carbonate inventories continued to decline at a slightly slower pace, dropping by 414 tons during the week to less than 99,000 tons. Among them, smelters' inventories decreased by 1,184 tons to 16,000 tons, hitting the lowest level in nearly three years, downstream inventories decreased by 1,890 tons to 46,000 tons, estimated available inventory days less than 10 days, and inventories in other sectors decreased by 1,120 tons to 37,000 tons, also at a relatively low level. Lithium carbonate production on the supply side increased by 768 tons on a weekly basis, but considering the disruption of exports from Zimbabwe and the level of port ore inventories, it is expected that the future supply elasticity will be limited. Demand continues to recover, with strong demand in energy storage and heavy trucks, as well as the gradual entry of power battery consumption into the peak season. In addition, with the addition of factors such as the Middle East war and the increasing pressure on overseas energy, household energy storage demand in Europe is on the rise. It is expected that in the next quarter, low inventory will remain the core contradiction, making lithium prices susceptible to rise but resistant to fall.