According to SunSirs' Commodity Market Analysis System, domestic lithium carbonate exhibited a volatile "initial rise followed by a decline" trend in May. At the beginning of the month, spot prices surged from 177,000 RMB/ton to nearly 200,000 RMB/ton, before subsequently correcting downward to 175,000 RMB/ton.

Based on market trends in May, the beginning of the month saw lithium carbonate inventories deplete rapidly and prices rise sharply. This surge was driven by a dual tightening of supply—both domestic and international—resulting from the implementation of Zimbabwe's ban on lithium ore exports, compounded by production halts at lepidolite mines in the Jiangxi region due to changes in mining rights. However, after the middle of the month, market sentiment shifted; concerns arose that high prices would dampen demand in the energy storage sector, while news regarding the resumption of production at the Jianxiawo mine continued to surface. Consequently, market enthusiasm waned, resulting in a price trajectory characterized by an initial rise followed by a subsequent decline.

In June, the supply side is expected to continue its contractionary trend

On the international front, Australia faces constraints regarding energy and shipping capacity, resulting in significant volatility in shipments; consequently, the anticipated increase in production volume has yet to materialize. Although exports from Zimbabwe have resumed, the inherent lead times associated with maritime shipping mean that any incremental supply gains are unlikely to be reflected in June's figures. In South America, the increase in output from salt lakes remains steady, with no new production capacity coming online; the supply situation is therefore expected to remain tight. Domestically, the suspension of operations at lepidolite mines in Yichun, Jiangxi—due to ongoing license renewal procedures—continues to result in a marked monthly reduction in supply. While lithium extraction from spodumene has seen a slight decline, this has been partially offset by modest increases from salt lakes and recycled materials; however, the overall incremental supply is expected to remain limited.

Demand resilience exceeded expectations, providing strong support for lithium prices

Power Battery Sector: In May, domestic sales of new energy vehicles (NEVs) rose by 13% month-on-month, while NEV sales in the European market surged by over 30% year-on-year. This momentum drove a 4% month-on-month increase in power battery cell production, with production schedules for June expected to see further expansion.

Production of energy storage battery cells grew by 9% month-on-month in May, a growth trend that is projected to continue into June. Driven by the increased output of both power and energy storage cells, production of downstream cathode materials rose by 8% month-on-month in May; this growth is likely to be sustained in June, thereby further boosting demand for lithium carbonate.

Market Outlook:

The tight supply-demand balance for lithium carbonate is expected to intensify in June, providing underlying support for price appreciation; however, bearish factors persist simultaneously. With a concentrated arrival of overseas lithium ore shipments scheduled for July, supply pressures are expected to ease significantly at that time; furthermore, elevated lithium prices may dampen downstream demand. On balance, lithium carbonate prices are projected to remain volatile throughout June, though specific market movements will ultimately depend on evolving supply and demand dynamics.

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