SunSirs: Supply Shrinks, Lithium Carbonate Rebounds Strongly

According to the Commodity Market Analysis System of SunSirs, the price of lithium carbonate has rebounded strongly recently. As of July 23, the benchmark price of domestic battery grade lithium carbonate was 67266 RMB/ton, an increase of 9.08% from the beginning of the month at 61666 RMB/ton, and an increase of 11.99% month on month; The benchmark price for domestic industrial grade lithium carbonate trading is 66366 RMB/ton, an increase of 11.6% from 59466 RMB/ton at the beginning of the month and a month on month increase of 13.84%.

Supply side contraction

According to industry insiders, the Yichun Land and Resources Bureau recently issued a red headed document to verify the historical approval issues of lithium mining enterprises in its jurisdiction. The mining rights of at least 8 lithium mica mines may have problems such as non compliant approval processes, non-compliance with environmental standards, cross-border mining, and higher-level approval.

On the afternoon of July 17th, Zangge Mining (000408) announced that its wholly-owned subsidiary Golmud Zangge Potash Fertilizer Co., Ltd. received a notice from the Haixi Natural Resources Bureau and Haixi Salt Lake Management Bureau on July 16, 2025, ordering the immediate cessation of lithium resource development and utilization activities. The notice requires the company to strictly comply with national laws and regulations, fulfill its corporate responsibilities, immediately stop illegal mining activities and actively rectify them, and improve the legal procedures for lithium resources. After the lithium resource procedures are legal and compliant, apply to the Salt Lake Management Bureau of Haixi Prefecture for resumption of production. Only after the application is approved can production resume.

On the evening of July 21st, Jiangte Electric announced that its wholly-owned subsidiary Yichun Silver Lithium plans to start shutdown and maintenance on July 25th, involving all lithium salt production lines, with an expected maintenance period of about 26 days.

Jiangte Electric explained in the announcement that the core purpose of this shutdown and maintenance is to "reduce production costs and ensure the safe and stable operation of production equipment in the future". During the maintenance period, Yichun Silver Lithium will organize a technical team to conduct a comprehensive inspection and maintenance of production equipment, and implement technical modifications to some equipment to improve the efficiency of production line operation. It is clearly stated that this maintenance is not expected to have a significant adverse impact on the annual business performance, and will not affect existing sales contracts and future supply in the near future.

Strong demand in overseas markets

The recovery of the European market and policy drivers

The growth rate of new energy vehicle sales in Europe has rebounded, coupled with intensified carbon emission policies (such as tightening carbon quotas in 2025), and it is expected that the market size of lithium batteries will reach 85 billion US dollars by 2025. In the field of energy storage, the installed capacity of household energy storage in Europe has increased by over 50% year-on-year, directly driving the demand for lithium salts. However, it should be noted that the expansion of domestic lithium salt production capacity in Europe (such as Northvolt's plan to achieve a self-sufficiency rate of 90% by 2030) may weaken its dependence on imported lithium salts from China.

The outbreak of the Southeast Asian market and the reconstruction of the industrial chain

Indonesia, Malaysia and other countries have attracted CATL and BYD to build factories through policies, with plans to build 140GWh of battery production capacity by 2030, directly driving demand for lithium salts. Taking Indonesia as an example, its nickel resource advantage and battery production capacity planning are synergistic, and it is expected that the import volume of lithium salts will increase by more than 30% year-on-year in 2025. However, due to the scarcity of local lithium resources in Southeast Asia, it still needs to rely on imports of lithium salts from China in the short term.

SunSirs lithium carbonate data analyst believes that under the influence of the "anti involution" policy, there has been a small-scale production reduction in the domestic lithium carbonate supply side. However, in the long run, overseas South American salt lake lithium extraction projects will be put into operation in the fourth quarter, which may suppress the rebound space. Specific changes in market supply and demand still need to be monitored.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.