Mid-July to early September, the lithium carbonate market showed sharp fluctuations. At the beginning of July, coal, polycrystalline silicon, industrial silicon, lithium carbonate and other over-corrected varieties broke away from the downward trend under the call for "anti-internal competition". Subsequently, the focus of the lithium carbonate market shifted to the resource end, with news such as the verification of reserves in Yichun, the suspension of production at Zangge Lithium Industry, and the maintenance of Yichun Yinli, triggering a tightening of mine supply. The suspension of the lithium mica mine in Yichun by Ningde Times pushed market sentiment to a climax, and the futures price of lithium carbonate once surged to around 90,000 RMB. Subsequently, market sentiment gradually cooled, and trading returned to the fundamentals. Domestic lithium carbonate production fluctuated slightly before continuing to grow, with the actual supply and demand gap below market expectations. At the same time, industry funds cherish the opportunity to hedge the market, and多头funds gradually became cautious, suppressing the rise in lithium prices. Perturbed by the news of the resumption of production of lithium mica in Yichun, lithium prices fell back and have been fluctuating in the 70,000 to 75,000 RMB range recently.
Off-season fundamental repair
The traditional peak season for the production of lithium battery midstream materials is from August to November. During this period, domestic production of lithium iron phosphate and ternary materials accounts for about 40% of the annual production, corresponding to the peak demand for lithium salts. Currently, we are in the lithium battery peak season, the fundamentals of lithium carbonate are repaired, the market spot is no longer loose, and the bottom support of lithium carbonate is lifted.
Supply pressure has been alleviated in stages. Since the beginning of August, Yichun lithium mica has been shut down, and the monthly production of lithium from mica has dropped to around 11,000 tons, which is only 55% to 60% of the peak. Although the arrival of spodumene from overseas has accelerated, compensating for the gap in the mica side, the domestic production of lithium carbonate in September is expected to be only flat compared to the previous month. At the same time, the growth of lithium salt imports from South America is limited. In July, the export volume of lithium carbonate from Chile was 20,900 tons, a 43% increase compared to the previous month and a 4% increase compared to the same period last year. Among them, the export to China was 13,600 tons, a 33% increase compared to the previous month and a 13% decrease compared to the same period last year. In August, Chile exported 16,903 tons of lithium carbonate, a 19.2% decrease compared to the previous month, of which, the export to China was 12,982 tons, a 4.8% decrease compared to the previous month and a 6.9% increase compared to the same period last year.
The demand in the peak season is expected to be strong. The promotion of new energy vehicles between China and Europe is optimistic, and the accelerated release of storage demand between China and the United States has exceeded expectations. The process of green energy transition is higher than expected. From January to August, the cumulative production of power and other batteries in China was 970.7 GWh, an increase of 54.3% year-on-year. From January to August, the cumulative production and sales of new energy vehicles in China were 9.625 million and 9.62 million, respectively, an increase of 37.3% and 36.7% year-on-year, respectively, and the new energy vehicle sales volume accounted for 45.5% of the total new vehicle sales volume. In particular, the new energy vehicle market in the passenger vehicle sector has gradually become the mainstream of the market, with a total penetration rate of 51.3% in the first 35 weeks, and it is expected to exceed 55% for the whole year. With the improvement of battery capacity and fast charging technology, consumers' range anxiety is gradually relieved, and several popular pure electric models are highly sought after, leading to a reversal in the pure electric penetration rate in the structure of electric vehicles. In the first 8 months, the sales volume of new energy vehicles in China, the hybrid vehicle accounted for about 35.8%, significantly lower than 40% in 2024, and the average battery capacity of electric vehicles was about 10% higher than the same period last year.
Domestic lithium carbonate inventories continue to decline. On September 18th, SMM reported that the domestic lithium carbonate inventory was 137,531 tons, a decrease of 9,81 tons compared to the previous week, a decrease of 0.7% compared to the previous week, and has been declining for 6 consecutive weeks since the beginning of August. Overall, the current total domestic inventory is 9.3% higher than last year, while the apparent consumption is about one-third higher than last year, and the inventory-to-sales ratio has clearly recovered. Breaking it down, the inventory of upstream salt factories is 30.7% lower than last year, and the lithium carbonate spot that can be circulated is tight.
Future Outlook
Lithium carbonate futures are in a corrective period, with both long and short funds being cautious and waiting for a direction-driven move. In the short term, domestic demand remains high, and downstream enterprises still have inventory demand to be released after the National Day holiday. Before Ningde Times' Jiayangwo mine resumes production, the domestic lithium carbonate spot market may maintain a tight state, and the lithium price has a strong bottom support.
The sustainability of supply from the resource end is in question. First, according to the "Notice of the Yichun Natural Resources Bureau on Compiling the Storage Verification Report", there are problems with the illegal handling of registration procedures in the eight mines in Yichun, requiring the submission of a supplementary report on the change of mineral species and the verification of storage before the end of September for expert review. Before the relevant reports are approved, there may be many discussions in the market about the sustainability of lithium wolfeite mining. Secondly, there is no specific resumption time for Ningde Times Ji Xiang Wu mine, and according to the report of "Future Daily", the resumption of work in this mine is expected to be completed in November. Ji Xiang Wu accounts for a large proportion of the domestic lithium salt supply and will affect market expectations. Finally, there is some uncertainty in the supply of African mines, such as the direction of development of the turmoil in Mali will affect the progress of the transportation of lithium concentrate in production; and domestic and foreign salt lake areas occasionally involve related environmental issues.
Demand expectations are different. In 2026, the domestic purchase tax subsidy for new energy vehicles will be adjusted from exemption to half time, and some consumers may choose to complete the purchase of a car within the year to avoid the increase in vehicle purchase costs. In terms of energy storage, the growth of domestic and foreign energy storage shipments has exceeded expectations, and the market calculations have generally increased by about 10% to 15% compared to the beginning of the year. The global green energy transition and the development of artificial intelligence technology may accelerate the demand for new energy storage.
Counting on the current fundamental data, by 2026, the global lithium supply surplus is expected to be about 11%, similar to 2024 and 2025, which could pose resistance to the rise in lithium prices. Perturbations in the resource end may still be the main driving force to open up the upside space for lithium prices. Some high-cost mines in domestic lithium mica and in Australia, as well as in parts of the Americas, Africa, are facing operational pressures. Perturbations in the resource end will bring about stage-by-stage trading opportunities.
Focus on macro or policy-driven demand. The domestic "two new" policy has significantly boosted the growth of car consumption. Since the subsidy was increased in September 2024, the total car sales and the sales of new energy cars in China increased by 10.4% and 38.8% year-on-year from September 2024 to August 2025, respectively, compared to the year-on-year growth rate from September 2023 to August 2024, which was 1.9 percentage points and 6.4 percentage points higher. Carbon emission policies in the European region have promoted the process of electrification. For example, the new target for the average emission of passenger cars in the EU from 2025 to 2027 is 93.6g CO2/km, and car companies that do not meet the requirements will face huge fines. To achieve the EU passenger car carbon emission standard, the International Clean Transportation Committee (ICT) expects the penetration rate of electric vehicles in the EU to need to be increased to 28%. Correspondingly, the sales of electric passenger cars need to increase by 700,000 to 800,000. Policy support plays an important role in the transformation of new energy transportation in various countries, and the policy orientation of major consumer countries affects the realization of demand expectations.
As an integrated internet platform providing benchmark prices; On September 26th, the benchmark price of lithium carbonate (battery grade) on SunSirs was 73,250.00 RMB per ton, a decrease of 6.77% compared with the beginning of this month (78,573.33 RMB per ton).
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