Core Viewpoint - The article argues that the lithium market is not experiencing severe oversupply as suggested by various domestic institutions, while the copper market is facing a gradual supply shortage. The analysis indicates that the inventory levels and consumption rates for both metals do not support the claims of significant oversupply in lithium [1][24]. Lithium Market Analysis - In 2024, the global consumption of lithium batteries is projected to be 1545 GWh, requiring approximately 105,000 tons of lithium carbonate. Considering a production yield of 90% and additional factors, the actual consumption is estimated at 114,130 tons [2]. - The total lithium carbonate consumption, including traditional industry usage, is expected to reach 128,000 tons, while the total supply is projected at 136,700 tons, resulting in a surplus of 8,700 tons, which equates to an oversupply ratio of 6.36% [3][4]. Copper Market Analysis - The consumption of cathode copper in 2024 is estimated at 2,733,000 tons, reflecting a year-on-year increase of 2.92%. The projected surplus for copper is approximately 46,900 tons, leading to an oversupply ratio of 1.72% [4][5]. Inventory Situation - The article details the inventory levels across different stages of the mining and processing supply chain for both lithium and copper. For copper, the total inventory is around 720,000 to 750,000 tons, which translates to approximately 25.33 days of consumption [9][10]. - In contrast, lithium inventory is estimated at 70,000 to 80,000 tons, corresponding to about 19.14 days of consumption, indicating a tighter supply compared to copper [10]. Smelting and Processing Inventory - In the smelting stage, lithium carbonate inventory is reported at 59,032 tons, equating to 12 days of consumption, while copper smelting inventory stands at approximately 95,700 tons, also representing about 12.76 days of consumption [12][13]. - The processing stage shows lithium inventory at 40,635 tons, which is about 8.3 days of consumption, while copper processing inventory is estimated at 120,000 to 150,000 tons, translating to 18 days of consumption [16][17]. Trade and Other Inventories - Lithium trade and battery inventories are around 37,170 tons, corresponding to 7.6 days of consumption, while copper trade inventories are estimated at 60,000 tons, equating to 8 days of consumption [19][20]. - The article notes a significant decline in lithium warehouse receipts, dropping from approximately 40,000 tons to 15,555 tons, a decrease of 61%, indicating tightening supply conditions [21]. Conclusion - The analysis concludes that lithium inventory levels are consistently lower than those of copper across various stages, challenging the narrative of severe oversupply in the lithium market. The article criticizes the methodology used by institutions to assess inventory levels and suggests that a more nuanced understanding of supply and demand dynamics is necessary [24][25]. - The article also highlights that while lithium experienced a surplus of 5-6% last year, copper had a surplus of only 1-2%, indicating a more favorable outlook for copper moving forward [26][27].