Lithium Markets Show Divergence as Spot Weakens Amid Futures Recovery

Lithium markets sent mixed signals this week, with physical spot prices declining while futures contracts staged a modest rebound. Battery-grade lithium carbonate slid 0.46% to $19,696/tonne, extending June's downward trend that began after prices briefly topped $22,000 earlier this month.

The futures market told a different story, with the most active contract gaining 3.34% to 153,920 yuan/tonne. This recovery coincided with a shift from backwardation to contango—a structure where future prices exceed spot levels. Such moves typically reflect trader expectations rather than current physical demand.

Market technicians note the $19,500 level may serve as critical support if selling pressure persists. The divergence between physical and paper markets highlights ongoing uncertainty about lithium's demand trajectory, particularly for electric vehicle batteries.