Global Business, BICHEM Group
Lithium carbonate prices have rebounded sharply, recently surpassing RMB 70,000/ton, a significant turnaround after months of market weakness. This rally is supported by supply-side tightening, including production cuts and maintenance at major lithium salt plants, as well as improving market sentiment.
Futures have risen steadily since mid-July, and several lithium producers have reported a recovery in earnings. Industry analysts believe the destocking cycle is nearly complete, with lithium prices beginning to form a new, higher baseline.
Shifting cost structures push prices higher
Although the lithium market remains oversupplied, low-cost resources are maxed out, and higher-cost producers are gradually regaining pricing power. With battery-grade lithium carbonate now climbing above the RMB 65,000/ton cost threshold, a new price floor appears to be forming.
According to GGII, lithium prices likely bottomed in mid-2025, with the next upward cycle expected in 2026 alongside broader capacity expansion across lithium materials.
Recovery gains momentum across the value chain
In H1 2025, China’s lithium battery output surged 68% year-on-year, led by strong demand for energy storage and power batteries. Key battery materials, including LFP cathodes, anodes, and electrolytes, also saw double-digit growth. Capacity utilization across major producers has returned to healthy levels, and top-tier players are restarting expansion projects backed by large-scale global orders.
Looking ahead
While short-term lithium supply in China still depends on imports, new domestic resources are emerging, albeit with longer development timelines. Overseas supply from Australia and Africa remains strong, despite price cuts.
With the lithium market stabilizing and key players operating at high utilization rates, consolidation is underway. Experts suggest RMB 100,000/ton is a healthy price target that ensures long-term supply chain viability. Solid-state battery commercialization, expected to accelerate from 2025 onward, may usher in a new phase of strategic growth and innovation.