Supply-side Disruptions Continue, Lithium Carbonate Prices Keep Rising

May 7th, news:

According to the commodity market analysis system: After the holiday, lithium carbonate has shown a strong rebound. As of May 7, the benchmark price for battery-grade lithium carbonate is 193,000 CNY/ton, up 20.62% month-over-month and 182.85% year-over-year. In less than half a year, the price has nearly doubled, and it is just a step away from the key threshold of 200,000 CNY/ton. The strong rebound in the price of lithium carbonate is not driven by a single factor but is the result of multiple industrial logic intertwining.

Supply Side: Multiple Supply Contractions in China and Overseas Markets

Chinese side: Since May, four major mines in Yichun, Jiangxi, China, have fully entered the stage of production halt for license renewal. According to industry estimates, this suspension is expected to last from six months to one year, which means that China's monthly lithium carbonate production will decrease by about 12%, significantly impacting the supply side.

The contraction on the overseas supply side is showing a “multi-point blossoming” trend: Although Zimbabwe’s ban on lithium concentrate exports has been somewhat eased, with the earliest arrival date now set for July, this will not alleviate supply-side pressure in the short term.

Affected by a surge in diesel prices—up over 50%—Australia has seen a significant increase in local mining costs, forcing many mines to cut production. This supply shock became particularly pronounced in May, further exacerbating the global tightness in lithium carbonate supply.

Demand Side: Shifting from Traditional Demand to Diversified Demand

Currently, although the growth rate of new energy vehicles in China has slowed down somewhat, the continued strength of the export market, especially the increase in battery exports, still constitutes the fundamental demand for lithium carbonate.

The explosive growth of the energy storage industry has become the core driving force on the demand side - the global demand for energy storage batteries in 2026 is expected to grow by 70%-80% year-on-year, leading to a significant increase in the demand for lithium resources. Market sources indicate that leading energy storage lithium battery companies have already scheduled orders until the end of 2026 to the second quarter of 2027.

Combining the SpotCom data: Currently, the short-term moving average (red 10-day moving average) is above the long-term moving average (blue 20-day moving average), indicating an upward trend. The rigid contraction in the supply side and the structural growth in the demand side together constitute a strong momentum for price increases.

But there are also potential risks: the uncertainty of supply disruptions, coupled with the possibility that downstream buyers may resist due to high prices. Additionally, looking at the current spot market, prices are already at a high level, leaving limited room for further increases.

Specific price trends will still need to be monitored based on market changes.