Data indicates that in the first quarter of 2026, shipments of energy storage lithium batteries in China reached 215 GWh, representing a year-on-year increase of 139%; Leading companies have orders scheduled through to the end of 2026 and into the second quarter of 2027; with capacity at full utilization and priority given to high-margin orders, domestic battery production schedules have set new peaks for three consecutive months. The combined effects of dual-engine growth from energy storage and power batteries, constrained raw material supply, and optimized export structures have driven the lithium industry chain to strengthen continuously since the first quarter, making it the most certain high-growth sector in the new energy field.

I. Key Reasons for the Strengthening of the Lithium Industry Chain

Explosive demand: Dual growth in energy storage and power batteries, with production schedules consistently exceeding targets

Energy storage shipments surged by 139% year-on-year, whilst lithium battery production in May reached approximately 249 GWh, a further 6% increase month-on-month; battery manufacturers are operating at full capacity with low inventory levels; Sales of new energy vehicles are steadily recovering. Coupled with the accelerated industrialization of solid-state and sodium batteries, this is driving robust growth in lithium salt demand, becoming the core driver of market trends.

Supply-Side Contraction: Overseas Production Cuts + Policy Restrictions, Persistent Raw Material Tightness

Production of lithium concentrate at Greenbushes in Australia has been reduced by approximately 11%; exports of lithium ore from Zimbabwe are restricted, making it difficult to increase volumes in the short term; Domestic lithium mica mines have been temporarily shut down due to policy-related license renewal requirements, resulting in insufficient increases in raw material supply. This has constrained the operations of lithium salt manufacturers, shifting the supply-demand balance towards a tight equilibrium.

Industry de-escalation + profit recovery, with both volume and margins rising

Coordinated production cuts across the supply chain have curbed disorderly expansion; leading enterprises have seen a significant improvement in profitability, shifting from ‘price wars’ to ‘price stability and efficiency gains’, with a marked increase in investor interest.

Optimized export structure, with strong support from overseas demand

II. Comparison of Customs Import and Export Data (January–March 2026)

Lithium carbonate: Cumulative imports reached 83,000 tons, up 65% year-on-year; compared to 50,300 tons in the same period of 2025. Reliance on overseas raw materials has increased, ensuring stable domestic supply.

Lithium hydroxide: Cumulative exports stood at 8,000 tons, down 35% year-on-year; compared to 12,300 tons in the same period of 2025. Exports have shifted towards high-value orders, resulting in a decline in volume but an increase in value.

Lithium Batteries: In the first quarter, exports of the “New Three” (new energy vehicles, lithium batteries and solar cells) saw strong growth, with lithium battery exports increasing 3.48-fold year-on-year, driven by continued surging overseas demand.

III. Production Capacity and Supply Landscape Since April

Lithium Concentrate: Import volumes have fallen slightly month-on-month; supplies from Australia and Africa remain tight, keeping raw material prices firm.

Lithium Carbonate: Domestic output fell slightly month-on-month, with industry operating rates at 72%–76%. Maintenance work combined with raw material shortages has led to tight spot market supply.

Lithium Hydroxide: Output remained largely unchanged, driven by demand for high-nickel batteries, resulting in structural tightness in supply.

Lithium Batteries: Production schedules have hit peak levels for three consecutive months, with leading manufacturers operating at full capacity and capacity utilization exceeding 90%, with orders extending into the second quarter of next year.

Overall, the supply landscape is characterized by tight raw materials, stable lithium salts and booming battery demand, with the entire industry chain operating at low inventory levels and high capacity utilization.

IV. Price Trends Across the Entire Industry Chain

Battery-grade lithium carbonate: SunSirs benchmark price on 29 April was 174,000 RMB/ton, up 32.5% since the start of the year and up 8.3% in April alone.

Lithium hydroxide: 168,000 RMB/ton, up 27.6% since the start of the year, supported by strong demand for high-nickel grades.

Lithium iron phosphate: 63,000 RMB/ton, up 15.2% since the start of the year, with smooth cost pass-through.

Electrolyte: Market price 38,000 RMB/ton up 9.5% since the start of the year, driven by a recovery in lithium hexafluorophosphate prices.

Lithium-ion batteries: Quotations for energy storage and power battery cells have risen steadily, with profitability continuing to recover.

Prices are exhibiting a virtuous cycle of raw materials leading the rise, lithium salts following suit, cost pass-through to materials, and subsequent price increases for battery cells.

V. Logic behind price fluctuations in upstream and downstream sectors

Upstream lithium mines: Overseas production cuts and policy restrictions have led to tight supply and high prices, providing strong cost support for lithium salts and serving as the starting point for price increases.

Midstream lithium salts: Explosive demand coupled with supply contraction has driven synchronous price increases for lithium carbonate and lithium hydroxide, with processing fees recovering and leading companies seeing significant profit growth.

Cathodes / Electrolytes / Separators: Cost pass-through has been smooth, with product prices rising in tandem with lithium salts, leading to a comprehensive improvement in industry profitability.

Downstream lithium batteries: Explosive demand for energy storage and power applications, with production schedules consistently exceeding expectations. Costs are being passed on smoothly, with priority given to high-margin orders, leading to simultaneous growth in both volume and profit.

The entire supply chain has shifted from being cost-driven to demand-led, ensuring the sustainability of price increases.

The current strength in the lithium industry chain is the result of the convergence of four factors: an explosion in energy storage demand, a rigid contraction in supply, a shift away from internal competition within the sector, and an optimization of the export structure. Battery production schedules have exceeded targets for three consecutive months, confirming the reality of strong demand; constraints on raw material supply have laid the foundation for prices; and with the entire chain shifting from loss to profit and seeing both volume and profit rise, the lithium industry chain has entered a new, certain upward cycle.

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