According to China Chemical News, the lithium carbonate market has reversed its two-year downtrend since the second half of this year, with prices rebounding from RMB60,000 per ton to reclaim the RMB70,000 threshold. Industry insiders view this rally with mixed feelings: relief that the market has finally stabilized, yet uncertainty about sustained upward momentum.

Data from SunSirs shows that on October 17, the average price of battery-grade lithium carbonate reached RMB 73,200 , marking a RMB13,300 increase from the June 25 low point—a 22.23% surge.

In reality, the lithium carbonate market endured a prolonged and severe downturn spanning nearly two years. In April this year, both the main lithium carbonate futures contract on the Guangzhou Futures Exchange and Shanghai Steel Union's spot quotes fell below the critical RMB 70,000 threshold. By late June, prices hit a new low of RMB 59,000. At this price level, the industry faced widespread production losses. Some mica-based lithium extraction enterprises in Jiangxi and Sichuan began phased production halts, while high-cost lithium pegmatite mines in Australia reduced extraction volumes. To maintain cash flow, some domestic lithium salt producers even dumped inventory at prices “barely covering raw material costs,” further intensifying downward pressure.

When lithium carbonate prices hit RMB 60,000 , the market found bottom support. Entering July, the lithium carbonate futures market first signaled a turnaround. On July 21, the main contract closed above RMB 70,000. The spot market followed suit, with the average lithium carbonate price reaching RMB 70,800 on July 28.

Supply tightened due to policy impacts. From a national resource security perspective, the newly revised Mineral Resources Law of the People's Republic of China explicitly designates lithium as a strategic mineral critical to national economic security and strategic emerging industries, subject to protective mining practices. This policy will increase production costs for the mineral.

Meanwhile, demand remains stable. SunSirs' analysis team believes that the Ministry of Commerce's Office has organized this year's “New Energy Vehicle Consumption Season” campaign across thousands of counties and towns, requiring the implementation of vehicle trade-in policies. These measures will further stimulate new energy vehicle consumption, potentially boosting demand for lithium carbonate.

Improved supply-demand dynamics drive sustained inventory drawdowns. Since June, domestic lithium carbonate inventories have shown a continuous depletion trend. By the end of September, domestic inventories had decreased by approximately 21,000 metric tons compared to the end of June—a nearly 50% drop—reaching near-annual lows and propelling market prices upward.

Supply cuts implemented this year are expected to resume by 2026. The lithium market may continue facing pressure from oversupply. After October, as demand seasonally weakens, the pace of lithium carbonate destocking may slow, making sustained one-sided price increases unlikely.

Regarding long-term demand, Goldman Sachs notes that lithium demand remains robust in recent years. However, it is noteworthy that from 2025 to 2028, the supply increases currently planned by producers far exceed market requirements. Regarding China's electric vehicle (EV) demand, short-term performance remains robust due to subsidies and price reductions. However, sales are expected to slow after subsidies are phased out between 2027 and 2028, with 2027-2030 sales falling below previous projections. Meanwhile, power technology choices also influence lithium demand. By 2030, plug-in hybrid vehicles (PHEVs) are projected to account for half of China's EV sales. In contrast, Western markets favor hybrid vehicles with lower lithium intensity, potentially reducing overall lithium demand.

In summary, the logic of “supply exceeding demand” in the lithium carbonate market remains unchanged. Relevant enterprises must achieve breakthroughs by expanding into emerging markets and exploring energy storage applications. They should gain competitive advantages through technological innovation and cost control.

As an integrated internet platform providing benchmark prices, on October 27, the benchmark price of SunSirs lithium carbonate (industrial grade) was 74,133.33 RMB/ton, up 3.80% from the beginning of this month (71,416.67 RMB/ton).

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