Lithium carbonate supply remains robust in China

September 09, News

According to the commodity market analysis system: Recently, lithium carbonate has been in a weak fluctuation pattern, once again approaching the cost line. As of September 9, the benchmark price of battery-grade lithium carbonate in China was 74,033 CNY/ton, up 6.72% month-over-month and down 7.69% year-over-year. The benchmark price of industrial-grade lithium carbonate in China was 71,966 CNY/ton, up 5.32% month-over-month and down 7.5% year-over-year.

Supply-demand dynamics show marginal improvement, but inventory pressure remains.

Demand is seasonally picking up, and the production of lithium iron phosphate materials in September is expected to reach a new high, with five consecutive months of month-on-month growth. The demand for energy storage batteries remains at full capacity.

The supply-side capacity is sufficient.

The 40,000-tonne new project at Qinghai Salt Lake entered commissioning in June, while a certain lithium salt plant in Sichuan has begun the ramp-up phase of its pyroxene production line. Despite rising costs prompting accelerated closures of high-cost capacity (including Australian hard-rock lithium mines and partial shutdowns at Jiangxi’s mica mines), the industry’s overall operating rate remains robust, underscoring the continued strength of the supply side.

Market Drivers: Policy Disruptions and Cost Dynamics

In the short term, price fluctuations were disrupted by supply-side policy measures. The shutdown of the Jianxi Ningde Times Jiexiawo mine once triggered market concerns about a potential contraction in supply, fueling a price rebound in August. However, as the market came to realize that the impact of the shutdown was limited—and with expectations of resumed production beginning to emerge—market sentiment gradually cooled down.

Cost structure reshapes market competition: Lithium extraction from salt lakes, with its low-cost advantage, has shown strong resilience during the price downturn, leading to an increased share of supply. The increase in low-cost supply further suppresses the room for price recovery, forcing high-cost mines to shut down and accelerating the industry's consolidation in China.

Lithium carbonate data analysts believe that lithium carbonate is currently in a painful period of capacity clearance, and prices will fluctuate around the cost line. The specific situation still needs to be closely monitored for market changes and related policies in China.