August Lithium Carbonate Market Shows "Roller Coaster" Trend in China

August 26, News

According to the commodity market analysis system: In August, the lithium carbonate market showed a "roller coaster" trend. At the beginning of the month, the benchmark price for battery-grade lithium carbonate was 71,333 CNY/ton, which then rose to 83,733 CNY/ton by the 20th, and subsequently fell to 81,733 CNY/ton. For industrial-grade lithium carbonate, the benchmark price at the beginning of the month was 70,333 CNY/ton, reaching a monthly high of 81,166 CNY/ton on the 20th, and then falling to 80,166 CNY/ton by the end of the month.

Ning Wang mine shutdown, lithium carbonate futures hit the upper limit

On July 7, the Yichun Natural Resources Bureau issued a notice requiring eight lithium-related mining companies to complete the preparation of reports on the verification of changes in mineral reserves by September 30, involving eight enterprises. On August 9, CATL's Jiangxi Jianxiaowu mining area suspended operations due to the expiration of its mining license, and the suspension could last for more than three months. The news caused a significant market reaction, with the main contract of lithium carbonate futures, LC2511, hitting the daily limit up on August 11. Currently, apart from the expiration of the mining license for CATL's Jianxiaowu porcelain clay mine, the mining licenses for the other seven mines will not expire until after 2027. During the period of renewing the mining licenses, the probability of all mines suspending operations is low.

The fundamental supply-demand imbalance remains unchanged, with the market sentiment suddenly shifting.

On August 20, Jiangte Motor announced that its Yichun Yinlithium plant had resumed production, which, combined with expectations of a loosening in overseas supply, sent the main lithium carbonate futures contract hitting the daily limit down, closing at 80,980 CNY per ton—a price drop of 8%. Meanwhile, China’s newly commissioned production capacity continues to ramp up, while capacity utilization rates at contract-manufacturing firms are also on the rise. These factors could prompt a resurgence in operations at previously idled production lines, though Ningde’s recent shutdowns have yet to significantly impact overall supply dynamics.

Energy Storage Boom Offsets Auto Slump in China

On the demand side, the traditional off-season for new energy vehicles stands in stark contrast to the surge in energy storage demand. Meanwhile, the lithium-battery sector is already showing signs of fatigue, with ongoing pressure from overcapacity at the mid-to-low end. Some battery manufacturers continue to maintain inventory levels as high as 4 to 5 months.

Energy storage demand has become the key driver supporting lithium carbonate prices. In the first half of 2025, new energy storage installations grew by 160% year-on-year, fueling a sharp increase in demand for energy-storage-grade lithium iron phosphate. Production of lithium iron phosphate is expected to reach 309,200 tons in August, up 3.38% from the previous month, with some companies already seeing orders scheduled through the first quarter of 2026.

Lithium carbonate data analysts believe: The lithium carbonate market in August is essentially a product of policy-enforced compliance and spontaneous market adjustments. In the long term, the oversupply situation of lithium carbonate in China has not changed, and prices may fluctuate around the cost line. Specific developments still need to be monitored based on market changes.