Price trend
According to the commodity market analysis system of SunSirs, lithium carbonate has recently entered an upward trajectory. As of April 21, the benchmark price for battery-grade lithium carbonate—as tracked by SunSirs—stood at 170,000 RMB/ton, marking a month-on-month increase of 13.33% and a year-on-year surge of 143%. This latest round of price appreciation is not driven by a single factor; rather, it is the inevitable result of a synergistic interplay between two forces: expectations of supply contraction—triggered by multiple disruptions on the supply side—and the positive support generated by continuously recovering demand. Consequently, the industry's supply-demand landscape is gradually shifting toward a tighter balance, thereby providing a solid foundation for further price appreciation.
Supply Side: The convergence of multiple potential risks continued to reinforce market expectations of a supply contraction.
Zimbabwe: An export ban that persisted for nearly two months has resulted in delays in supply. Although several domestic companies have successively obtained six-month export quota approvals from the government since mid-April, the resumption of exports has not been instantaneous; companies still need to complete a series of export formalities, and the backlog of lithium concentrates cannot be shipped all at once. Consequently, the market anticipates that the arrival of large-scale lithium concentrate shipments at ports will be delayed until after July. Against this backdrop, market concerns regarding a tightening of lithium ore supply in May and June have continued to intensify. Proactive stockpiling of lithium ore has further exacerbated short-term supply tightness in the spot market, leading to phenomena such as declining lithium concentrate inventories at ports and a downward trend in processing fees for spodumene-based lithium production.
Australia: Recently, a fire broke out at one of the two sole oil refineries in the Australian state of Victoria. Although the incident did not directly impact diesel production, against the backdrop of global energy supply chain instability, market concerns regarding a potential diesel shortage in Australia have continued to escalate. As diesel serves as a critical energy source for lithium mining and transportation operations, a supply shortfall could directly disrupt local lithium production activities. While there have been no definitive reports to date of lithium mining projects adjusting their operations, expectations of a potential supply contraction have steadily intensified. Consequently, future developments regarding transit conditions through the Strait of Hormuz—as well as the pace at which Australia replenishes its diesel inventories—will emerge as key variables influencing the global supply of lithium.
Domestic Market: The structural contraction in lithium ore supply has further exacerbated the tightness on the supply side. As the core production hub for lepidolite ore in China, Yichun, Jiangxi, exerts a profound influence on the domestic supply landscape through fluctuations in its production capacity. Currently, several lepidolite mines in the Yichun region have already suspended operations; furthermore, four additional mines are expected to enter a suspension phase for license renewal in May, with another seven mines potentially facing shutdowns in the second half of the year. Moreover, the subsequent resumption cycle following such mine suspensions typically spans over a year. This structural contraction stems from heightened environmental compliance requirements and the pressure of cost inversions. With lithium now officially designated as a distinct strategic mineral, local mines are mandated to undergo a rigorous approval process to re-register lithium as their primary mineral product. This requirement—coupled with a substantial surge in the costs associated with tailings disposal—has intensified the survival pressures on small and medium-sized mines, thereby further tightening the domestic supply of lithium ore and serving as a key factor underpinning lithium carbonate prices.
Demand Side: Continued Recovery
The landscape characterized by the "dual-engine drive" of power batteries and energy storage batteries is becoming increasingly distinct, with the resilience of demand continuing to stand out. In the power battery sector, although domestic sales of new energy vehicles (NEVs) experienced a year-on-year decline in the first quarter, a significant increase in the battery capacity per vehicle drove the production of power battery cells to maintain a trajectory of rapid growth; first-quarter production of power cells surged by nearly 40% year-on-year, reflecting the inherent resilience of demand for power batteries. Concurrently, the energy storage sector has witnessed explosive growth: first-quarter production of energy storage cells soared by over 90% year-on-year, while the scale of awarded project capacity surged by an even more impressive 168%. The share of energy storage cells within overall battery production schedules continues to rise, emerging as a critical incremental driver for the growth in lithium demand. Against this backdrop, institutional forecasts regarding future battery production schedules remain optimistic, with scheduled production for both April and May demonstrating a month-over-month upward trend; this continuous upward revision of demand expectations has further bolstered the upward momentum of lithium carbonate prices.
Market Outlook
Taken together, the current upward trend in lithium carbonate prices is the result of a confluence between supply-side expectations of contraction—triggered by various disruptions—and a sustained recovery in demand. In the short term, supply-side uncertainties are expected to persist; specifically, developments at mines in Jiangxi (China), the progress of lithium concentrate exports from Zimbabwe, and the energy supply situation in Australia will continue to influence price trajectories. On the demand side, momentum is expected to remain robust, with dual support from the electric vehicle battery and energy storage sectors further reinforcing the price floor. However, it is worth noting that the price fluctuation range for lithium carbonate has recently narrowed. Moving forward, key factors to watch regarding price trends include the pace of production resumption at Jiangxi mines, the extent to which demand materializes, and the potential impact of changes in the global macroeconomic environment and supply chains. Overall, the tight supply-demand balance observed in the lithium carbonate market is expected to continue through the second quarter, with prices highly likely to remain at elevated levels.
SunSirs has been continuously tracking price data for over 200 commodities for nearly 20 years, please contact support@sunsirs.com for subscription.
