The lithium industry is entering a new cycle after a deep adjustment. Recently, the main contract of lithium carbonate futures has been rising and broke through the psychological figure of 100,000 RMB/ton on November 19th, creating a new high since June last year. As of the time of writing, despite a slight decline in the contract price, it is still fluctuating around this level. Market data shows that on December 3rd, the main contract of lithium carbonate futures was trading between 92,500 and 97,600 RMB/ton, with the closing price at 93,700 RMB/ton.
Some analysts pointed out that the rise in the futures market price of lithium carbonate is the result of the combined effects of factors such as the optimization of the industrial pattern and the improvement of demand, reflecting the recovery of industry prosperity. The pattern of strong supply and demand in the industry is expected to continue until the end of the year, bringing new development opportunities to enterprises in the upstream and downstream of the industry chain.
The optimization of supply and demand patterns supports the lithium price to strengthen
Looking at the spot market, the spot quotation for lithium carbonate is also in the range of 90,000 to 100,000 RMB per ton. Market data shows that on December 3, the price of battery-grade lithium carbonate was between 92,500 and 96,200 RMB per ton, with an average price of 94,350 RMB/ton. However, in June of this year, the price of battery-grade lithium carbonate once fell below 60,000 RMB/ton.
In the view of industry insiders, the phenomenon of synchronous rise in futures and spot prices is supported by strong demand expectations and market confidence. The high-speed growth of the downstream energy storage and new energy vehicle markets, combined with the diversified development trend of lithium battery application scenarios extending to low-altitude economy, humanoid robots and other fields, has jointly provided strong support for lithium consumption.
Guangzhou Futures Co., Ltd. analyst Tang Shu Bin, in an interview with the reporter of China Energy News, pointed out that the rise in the spot and futures prices reflects the market's relatively optimistic outlook for the strong growth in downstream demand. According to the survey data, in December 2025, the output of power + energy storage + consumer batteries in the Chinese market reached 220GWh, a month-on-month increase of 5.3%. With the strong demand expectations supporting, lithium prices may temporarily maintain a strong bias, but it is also necessary to pay attention to the disruptions from factors such as changes in the progress of individual capacity recovery on the supply side.
CITIC Futures Research Note pointed out that from a fundamental perspective, lithium resource supply continues to rebound, but demand is even stronger, and the supply and demand is still in a tight balance. The "trade-in" and purchase tax reduction policies have pushed the expectations of new energy vehicle production and sales at the end of the year to be better, and the economic performance of the energy storage side continues to improve, which has a long-term boost on lithium carbonate, and is expected to push the new round of upward cycle to start.
Lithium companies welcome a window period for profit repair
Notably, when the lithium carbonate price was previously sluggish, the downstream battery factories took the lead in profit. Now, the lithium price rebound may push the industry profit focus to gradually shift to the upstream resource end. From the third-quarter report, many lithium salt enterprises show a trend of repairing their performance. Among them, Tianqi Lithium's net profit for the first three quarters was 1.8 billion RMB, while it lost 5.701 billion RMB in the same period last year, turning from loss to profit. Ganfeng Lithium's net profit for the first three quarters was 260 million RMB, a year-on-year increase of 103.99%.
"The overall upward trend in lithium prices is expected to improve the gross profit margin and cash flow of upstream enterprises," said Tang Shubin. If the price of lithium carbonate can maintain at the relatively high level recently, high-quality enterprises with cost advantages are expected to walk out of losses. Enterprises with sufficient mineral resources reserves, leading technology and continuous innovation, and strong cost control will further consolidate their own advantages.
It is also worth mentioning that, along with the rise in the spot price of lithium carbonate futures, the Guangzhou Futures Exchange has adjusted the transaction fees for lithium carbonate futures contracts twice, and in the most recent adjustment, it also specified trading limits. "The exchange's increase in transaction fees and tightening of trading limits aims to guide the market to trade rationally, prevent short-term excessive fluctuations, and enhance the stability of market operations," explained Tang Shubin. "After increasing transaction fees, the trading cost for short-term speculators has increased, which is intended to cool the market and may encourage some speculative funds to exit, guiding prices to reflect fundamental changes more reasonably."
However, the surveyed participants also pointed out that for enterprises with the demand for hedging to offset price risks, the daily opening position number of hedging transactions is not subject to the trading limit standards announced in the circular, and will not affect the efficiency of hedging operations. "The increase in handling fees has slightly increased the transaction cost for frequent opening and closing operations, but compared with the overall value of the hedging business in terms of offsetting price risks, locking raw material costs or sales profits, the increase in handling fee costs is relatively controllable. The market maintains stable operation, and the futures market can more effectively play its role in price discovery and risk management, which is conducive to the long-term development of enterprises," said Tang Shubin.
Seize the opportunity to expand the boundaries of business
In the new up cycle of the lithium industry, related enterprises are also actively seizing opportunities, focusing on technological innovation and cost reduction and efficiency improvement, consolidating core competitiveness, and promoting the upgrading of the lithium industry towards efficient use of resources. At the same time, they are actively expanding the boundaries of their business and exploring new growth spaces.
Haiyuan Salt Lake previously stated that since this year, relying on the "dual-wheel drive" of the full industrial chain collaboration and lean management, it has focused on the core competitiveness of cost control, operational efficiency, and market response in three dimensions. Specifically, in terms of cost control, Haiyuan Salt Lake has deeply implemented the "Amoeba" business model, dividing the production units into independent accounting "small collectives", and fully activating the subjective initiative of each unit to reduce costs and improve efficiency through the internal market-oriented accounting mechanism; at the same time, it has optimized the logistics distribution path and warehousing management system to achieve a significant decrease in logistics costs. In terms of operational efficiency, Haiyuan Salt Lake has promoted digital transformation and upgrading to improve overall operational efficiency through technological empowerment. In terms of market response, the company has established an "integration of production, sales, supply, and storage" linkage mechanism, closely following market dynamics to adjust marketing strategies.
Against the backdrop of policy guidance to accelerate technological progress and transformation and upgrading of the industry, lithium salt companies need to start from multiple aspects such as technological innovation, green development, and industrial synergy, and strive to enhance the competitiveness of the industry, and strengthen their own resource security capabilities and the level of industrial chain synergy," said Tang Shubin.
At the same time, in response to the fluctuations in lithium prices, relevant enterprises need to actively use financial tools to manage risks and achieve stable development and high-quality upgrading. Some analysts point out that enterprises in the industrial chain can actively use futures tools for hedging based on production and operation conditions such as production volume and inventory volume, to stabilize the cost of raw material procurement or lock in product sales profits.
During the holding period of raw material inventory, a "buy a put option with a lower strike price and sell a call option with a higher strike price" butterfly option strategy can be adopted to lock in the value of the inventory, which is equivalent to setting up a "protection zone" above and below the price. In a range-bound market, industrial chain enterprises can cooperate with futures risk subsidiaries to use accumulated purchase options and other over-the-counter options to reduce purchasing costs. The mature use of financial derivatives such as futures and options has effectively promoted the improvement of industrial risk management capabilities, which helps industrial chain enterprises stabilize production and operation and promote the high-quality development of real economy enterprises. "Tang Shubin said.
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