The 15th Five-Year Plan clearly states the need to accelerate the development of strategic emerging industries such as new energy and new materials, intensify the construction of new energy infrastructure, and accelerate the building of a new energy system. Against the backdrop of policy support for green and low-carbon development and the construction of new energy systems, lithium carbonate, as a crucial raw material for lithium-ion batteries, is experiencing continuous demand growth driven by the development of the new energy vehicle and energy storage markets.
From a fundamental perspective, weekly lithium carbonate inventories maintained a slight downward trend, while the weekly operating rate of lithium carbonate refineries increased slightly. According to SMM data, as of the week ending December 12th, total weekly lithium carbonate inventory decreased slightly by 1.88% week-on-week to approximately 111,500 tons; the weekly operating rate of lithium carbonate refineries increased slightly to approximately 55%, with the operating rate for lithium extraction from spodumene increasing slightly to approximately 67%; the operating rate for lithium extraction from lepidolite decreased to approximately 30%; and the operating rate for lithium extraction from salt lakes decreased slightly to approximately 53%. Demand for power batteries continued to expand. Data from the China Automotive Power Battery Industry Innovation Alliance shows that in November, domestic power battery installations reached 93.5 GWh, a month-on-month increase of 11.2% and a year-on-year increase of 39.2%.
From the demand side, the dual drivers of power and energy storage, along with green and low-carbon development and the construction of new energy sources, constitute the demand support for lithium carbonate. On the supply side, several lithium projects have recently commenced production, and are expected to release additional supply in the future. On December 10th, Zijin Mining's first integrated lithium mica hard rock mining and processing project - the Xiangyuan Lithium Polymetallic Mine in Daoxian County, Hunan Province - was completed and put into operation, including a 5 million tons/year mining and processing project and a 30,000 tons/year battery-grade lithium carbonate project. The Greenbushes lithium mine CGP3 project in Australia, with a planned capacity of 520,000 tons of lithium concentrate, is expected to commence production by the end of 2025. On September 20th, Tibet Mining's Zabuye Salt Lake project completed 120 hours of functional testing and officially commenced production, with an annual lithium carbonate capacity of 12,000 tons. On September 14th, Zijin Mining announced that its "Lithium Cores 3Q Lithium Salt Lake Project with an annual production capacity of 20,000 tons of lithium carbonate" officially commenced production in Argentina.
In 2026, the lithium carbonate market is expected to maintain a trend of increasing supply and demand, with the price center likely to shift upwards overall. Both supply and demand are projected to see year-on-year growth of around 30%. Regarding whether energy storage can drive unexpectedly high growth in total demand in 2026 and beyond, industry predictions currently vary widely, and there is no consensus. If we use the overall target of "achieving a national new energy storage installed capacity of over 180 gigawatts (180 GW) by 2027" from the "Special Action Plan for the Scaled Construction of New Energy Storage (2025-2027)" as a basis for calculation, a year-on-year growth rate of around 30% could be a starting point for considering energy storage demand growth. During periods of price volatility, to cope with lithium price fluctuations and achieve stable development, companies in the industry chain can use futures contracts for hedging based on their production and inventory levels, stabilizing raw material procurement costs or locking in product sales profits. Companies with sufficient mineral resource reserves, leading and continuously innovating technologies, and strong cost control capabilities are likely to further consolidate their advantages in development. Against the backdrop of policies guiding the industry to accelerate technological progress and transformation and upgrading, lithium salt companies need to start from multiple aspects, including technological innovation, green development, and industrial collaboration, to enhance their industrial competitiveness, strengthen their resource security capabilities, and improve their supply chain collaboration.
Recently, downstream demand for lithium batteries has been relatively optimistic, with energy storage maintaining high growth. The market anticipates that demand in the first quarter of 2026 will remain strong despite the traditional off-season. However, the possibility of a short-term mismatch due to the off-season in the power battery sector cannot be ruled out. In early next year, attention should be paid to downstream inventory replenishment demand and the progress of individual lithium resource projects resuming production, as well as monitoring subsequent changes in energy storage demand and policies affecting both supply and demand.
As an integrated internet platform providing benchmark prices, on December 19th, the benchmark price of lithium carbonate (battery grade) according to SunSirs was 101,733.33 RMB/ton, an increase of 9.08% compared to the beginning of the month (93,266.67 RMB/ton).
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