According to data from SunSirs' Commodity Market Analysis System, lithium carbonate staged a strong rebound following the holiday period. As of May 7, the benchmark price for battery-grade lithium carbonate stood at 193,000 RMB/ton—a month-on-month increase of 20.62% and a year-on-year surge of 182.85%. In less than six months, prices have nearly doubled, bringing them just one step away from the critical threshold of 200,000 RMB/ton. This robust rebound in lithium carbonate prices is not driven by a single factor, but rather represents the result of the interplay of multiple underlying industry dynamics.

Supply Side: Multiple Supply Contractions in Domestic and Overseas Markets

Domestic Front: Since May, four major mines in Yichun, Jiangxi, have fully entered a phase of production suspension for license renewal. According to industry estimates, this suspension is expected to last between six months and one year; this implies a reduction of approximately 12% in domestic monthly lithium carbonate output, thereby exerting a significant impact on the supply side.

The contraction in overseas supply is manifesting as a widespread phenomenon across multiple fronts: although Zimbabwe’s ban on lithium concentrate exports has seen some relaxation, the earliest possible arrival time at ports is July, meaning it will be unable to alleviate supply-side pressures in the short term.

Affected by a surge of over 50% in diesel prices, mining costs in Australia have risen sharply, forcing numerous mines to cut production. This supply shock became particularly pronounced in May, further exacerbating the global shortage of lithium carbonate.

Demand Side: Extending from Traditional to Diversified Demand

While the growth rate of domestic new energy vehicles has slowed somewhat, the sustained momentum in export markets—particularly the surge in power battery exports—continues to serve as the fundamental bedrock for lithium carbonate demand.

The explosive growth of the energy storage sector has emerged as the primary driver on the demand side; global demand for energy storage batteries is projected to see a year-on-year increase of 70% to 80% in 2026, leading to a substantial surge in the demand for lithium resources. Market reports indicate that leading lithium-ion battery manufacturers in the energy storage sector have already filled their production schedules with orders extending from late 2026 through the second quarter of 2027.

Market outlook

According to SunSirs, the rigid contraction on the supply side—combined with structural growth on the demand side—collectively constitutes a powerful driving force behind rising prices. However, potential risks also loom: the uncertainty surrounding supply-side disruptions is compounded by the risk of resistance from downstream buyers should prices become excessively high. Furthermore, based on SunSirs' Spot Price Index, current prices are already at elevated levels, suggesting limited room for further upside. As for the specific trajectory of prices, market developments will continue to require close monitoring.

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