SunSirs: Driven by a Confluence of Supply and Demand Factors, Lithium Carbonate Prices Continued to Rise

Price trend

According to the business data analysis system of SunSirs, a series of positive market drivers have recently emerged, providing comprehensive support from both the supply and demand sides, pushing up the price of lithium carbonate. As of January 27th, the benchmark price of battery-grade lithium carbonate tracked by SunSirs was 16,900 RMB/ton, a 9% increase compared to the same period last week (January 20th), a 43.5% increase month-on-month, and a 112% increase year-on-year.

Expectations of supply contraction were rising, with disruptions in the Jiangxi production region being the core contributing factor

The core variables on the supply side stemmed from policy constraints and production disruptions in the Jiangxi production region. With the release and implementation of the new "Mineral Resources Law" and the "Action Plan for Comprehensive Management of Solid Waste," the regulatory requirements and environmental supervision of lithium mining had become significantly stricter, with tailings treatment becoming a key area of regulation in the lithium mining process. Market reports indicated that some mines in Jiangxi were considering suspending operations, raising widespread concerns in the industry about a potential supply contraction. However, there were temporarily no official documents or company announcements confirming any plans for production suspension.

Policy benefits on the demand side were being released, providing strong support for demand during the off-season

Last week, lithium carbonate prices fell due to expectations of a decline in demand for new energy vehicles in the first quarter. However, the "Notice on Implementing Large-Scale Equipment Upgrading and Consumer Goods Replacement Policies in 2026" issued by the National Development and Reform Commission and the Ministry of Finance improved market expectations regarding the demand for new energy vehicles in the first quarter of 2026.

The energy storage sector was also performing remarkably well, with a strong current order book.  This, coupled with adjustments to the VAT export rebate policy for battery products, led to a significant "rush to export" effect.

Prices were fluctuating at high levels, and market divergence was intensifying

As lithium carbonate prices continued to rise, market divergence was gradually increasing. From the downstream market perspective, companies had limited acceptance of the high prices, and their purchasing enthusiasm had significantly decreased. At the same time, there were concerns about increased supply. During the period of continuously falling lithium carbonate prices in 2025, some higher-cost production capacity was forced to shut down due to price inversions, but because the period of low prices was relatively short, this capacity was not completely eliminated. The current rapid price increase had a strong stimulating effect on increasing supply, which may encourage the restart of this idle capacity, thereby alleviating the supply shortage.

Market outlook

According to SunSirs' lithium carbonate data analyst, the active stocking up by downstream buyers will provide short-term support for prices. However, once the concentrated purchasing period ends, if there is no sustained demand afterward, the market is likely to readjust and find a new price equilibrium. The specific outcome will depend on changes in market supply and demand.

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