On January 30 and February 2, lithium carbonate futures prices plummeted amid sharp declines in gold and silver prices, but have begun rebounding over the past two days. Fundamentally, the lithium carbonate market currently exhibits robust supply and demand, with demand growth outpacing supply growth. Inventory levels continue to decline, indicating an improvement in the supply surplus situation. Lithium carbonate prices are expected to continue their upward trajectory.

On the supply side, relevant data indicates that in December 2025, China's salt lake production increased by 29.47% year-on-year, while lithium mica production rose by 22.31% year-on-year. For the full year 2025, China's salt lake production reached 146,980 tons, up 15.07% year-on-year, and lithium mica production totaled 180,650 tons, increasing by 17.38% year-on-year.

Regarding finished products, China's lithium carbonate output has increased significantly. In December 2025, battery-grade lithium carbonate production reached 74,110 tons (up 38% year-on-year), while industrial-grade lithium carbonate production amounted to 25,090 tons (up 51% year-on-year). In 2025, China's battery-grade lithium carbonate output reached 714,735 tons, a year-on-year increase of 57.28%; cumulative industrial-grade lithium carbonate production totaled 255,690 tons, up 23.23% year-on-year.

In December 2025, China's total lithium carbonate smelting capacity stood at 153,980 tons, a year-on-year increase of 25.79%, with a capacity utilization rate of 58%.

Regarding raw materials, lithium ore prices have steadily rebounded since June 2025 due to increasingly stringent approvals for mining rights in China and reduced shipments from overseas mines. As of January 30, imported spodumene prices stood at $2,070/ton, compared to $845/ton during the same period in 2025; while domestic lithium mica prices reached CNY 3,240/ton, compared to CNY 1,230/ton during the same period in 2025.

The recovery in lithium ore prices has increased production costs for lithium carbonate. As of January 30, the production cost for purchased spodumene concentrate stood at CNY 142,475/ton, and for purchased lithium mica at CNY 144,430/ton—both representing relatively high levels over the past two years.

On the demand side, boosted by the “trade-in” policy, the new energy vehicle market performed well in 2025, providing some support for lithium carbonate consumption. In December 2025, China's new energy vehicle production and sales reached 1.718 million units and 1.71 million units respectively, representing year-on-year increases of 12.3% and 7.2%. In 2025, China's new energy vehicle production and sales reached 16.626 million units and 16.49 million units respectively, representing year-on-year growth of 29% and 28.2%.

In 2025, China exported 2.615 million new energy vehicles, a 103.7% increase year-on-year. In December 2025, China exported 300,000 new energy vehicles, marking a 124.8% year-on-year increase.

In the energy storage sector, the market will continue to expand in 2025, boosting lithium carbonate consumption. In December 2025, China's energy storage cell production reached 52.7 GWh, a year-on-year increase of 47.99%. For the full year 2025, cumulative production totaled 529.43 GWh, up 58.83% year-on-year.

By 2027, China's new energy storage installed capacity is projected to exceed 180 million kilowatts, driving approximately 250 billion yuan in direct project investment. With the new energy vehicle sector maintaining strong momentum and positive energy storage demand, future lithium carbonate consumption outlook remains optimistic.

Regarding inventory, as of December 31, 2025, lithium carbonate inventory stood at 56,664 tons, comprising 38,998 tons in downstream storage and 17,667 tons at smelters. Since August 2025, lithium carbonate inventory has been steadily declining, indicating that demand growth outpaces supply growth. Fundamentally, although the lithium carbonate market remains oversupplied, demand continues to improve, gradually reducing the surplus.

Overall, the ongoing improvement in fundamentals is supporting lithium carbonate prices. Rising lithium ore prices are driving up production costs, while sustained demand growth and declining inventories are continuously reducing the supply surplus. Looking ahead, CATL's Jianxiawo mine remains suspended, while multiple lithium mining rights in Jiangxi have been revoked, tightening domestic lithium ore supply. With the energy storage sector maintaining robust growth, lithium carbonate demand is expected to sustain high expansion, potentially driving further upward momentum in lithium carbonate futures prices.

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