Supply Disruptions of Lithium Carbonate Dominate Expectations, Oscillating Pattern Hard to Change

April 14 news

According to the commodity market analysis system: Recently, lithium carbonate has shown a fluctuating trend. As of April 14, the benchmark price of battery-grade lithium carbonate in China was 159,000 CNY per ton, up 1.27% month-over-month and 124% year-over-year. With multiple factors such as mining disruptions and changes in supply and demand intertwining, the market maintains a fluctuating consolidation trend, with short-term uncertainties still prominent.

Mining Sector Disruptions: China’s License Renewal Has Limited Impact, While Overseas Policies Remain Uncertain

In China, the Jiangxi Provincial Department of Natural Resources recently released an assessment report on the transfer benefits of four lithium mining rights in Yichun, drawing market attention to the local lithium supply. The four mines listed in this announcement are the Tong'an Porcelain Mine in Tong'an Township, Yifeng County, the Dagang Porcelain Clay Mine in Huaqiao Township, Yifeng County, the Baishi Huashan Porcelain Stone Mine in Huaqiao Township, Yifeng County, and the Dingxing Porcelain Stone Mine in Dongcao Village, Yifeng County. These four mines involve entities such as Yongxing Materials, Corun, and Jiuling Lithium, accounting for nearly 30% of the national lepidolite production capacity, resulting in a reduction of over 50,000 tons in annual lithium carbonate supply.

On the overseas front, Zimbabwe has made phased progress toward lifting its ban on lithium ore exports. Recently, the Zimbabwean government, in the form of a letter from the Minister of Mining, clearly outlined a package of preconditions for lifting the export ban on lithium ore. These conditions include companies’ written commitments to build local beneficiation facilities, completion of a lithium sulfate processing plant by January 1, 2027, and ensuring that all export revenues are fully remitted back to the country. Meanwhile, the government will allocate export quotas, impose a 10% export tax on refined concentrates, and require companies to submit monthly progress reports. According to market news on April 13, Zimbabwe has approved an export quota of 6 months for Chinese-funded enterprises, with Huayou, Zhongkuan, Yahua, and Shengxin each receiving 200,000 tons. The quotas will be renewed after the six-month period expires. Applications for export licenses are being submitted starting today, and exports are expected to resume soon.

Fundamentals: With both supply and demand increasing along with inventory accumulation, price increases are facing resistance.

From the supply side, since April, the production of lithium carbonate in China has gradually recovered. As the salt plants that were previously under maintenance have resumed production one after another, the pace of capacity release in China has accelerated. At the same time, the export volume of lithium carbonate from Chile overseas has increased significantly, becoming an important force to supplement China's supply.

On the demand side, overall resilience has been maintained, and a steady recovery trend is evident. Although power vehicle sales data have been relatively weak due to seasonal factors and the phasing out of subsidies, end-user battery capacity has increased significantly. Meanwhile, the energy storage sector is expected to remain optimistic, with leading companies largely maintaining full production levels. As the holiday effect in March comes to an end, demand has rebounded sharply on a month-on-month basis. From a structural perspective, demand for lithium iron phosphate (LFP) batteries is set to increase substantially month-on-month, while demand for ternary lithium batteries has been relatively weaker. Going forward, close attention should be paid to changes in the structure of power-end applications and export expectations.

Spot Market Trend Forecast

From the Spotcom price curve, it can be seen that the current lithium carbonate price curve is in a tangled state, indicating that the Chinese market has entered a period of trendless consolidation.

Combining the five-level position, the current price is at a high level in the long cycle, with less upward momentum.

Overall, the core logic driving the current lithium carbonate market is that supply disruptions are dominating price expectations. Chile’s lithium carbonate export volume may remain at a high level, and as Zimbabwe’s export policies gradually become clearer, market concerns about short-term supply shortages have significantly eased. As a result, the fundamental outlook for lithium carbonate has weakened marginally in the short term. However, demand remains robust, and the market is expected to continue fluctuating in the near future. Specifically, it will be crucial to monitor the progress of the Yichun lithium mine licensing renewal, the implementation of Zimbabwe’s export quotas, the pace of resumption of operations at Chinese salt plants, and changes in downstream demand.