The possibility of slower electric vehicle sales in China sent the battery materials price into a second weekly decline last week as EV registrations tumbled by more than fifth in October from the prior month.

“It’s likely for lithium prices to face some small correction until early next year,” Susan Zou, Shanghai-based analyst at Rystad Energy told Bloomberg.

“Battery makers need to de-stock while EV manufacturers are about to meet their annual targets.

“Meanwhile, they face elevated costs for raw materials and traditionally weaker consumption in the first quarter of the year.”

Morgan Stanley analysts agree, saying in a note last week there is likely to be some price pullback when underlying demand for EVs start to weaken.

“We see the near-term lithium market remaining tight, supporting lithium prices…however we note industry players may become more caution about placing orders and building inventory.”