Lithium carbonate prices rebound, the industry chain enters a profit recovery cycle

Securities Daily Reporter Li Ting

On May 13, Shanghai Nonferrous Network’s latest data showed that the domestic spot price range for battery-grade lithium carbonate was between 198k yuan/ton and 203k yuan/ton, with an average market price reaching 200.5k yuan/ton, returning to the 200k yuan/ton threshold; industrial-grade lithium carbonate was quoted between 194k yuan/ton and 198k yuan/ton, also approaching the 200k yuan/ton mark.

In fact, since lithium carbonate prices stabilized after hitting bottom in 2025, they have been on a continuous rebound, with prices climbing steadily since 2026, reversing the long-term industry downturn.

Industry insiders believe that, influenced by the rapid price increase, the profit structure of the upstream and downstream lithium battery industry chain will undergo a reshaping in the short term. Meanwhile, as the rise in lithium carbonate prices transmits to end markets, the lithium battery industry is experiencing a new round of deep adjustments in supply, demand, and profits.

Demand Surpasses Expectations, Driving Up Lithium Prices

On the demand side, as the core downstream of lithium batteries, the new energy vehicle market maintains steady growth. In April, domestic new energy vehicle production and sales both exceeded 1.3 million units, with both achieving year-on-year growth. The new car market continues to penetrate, and the average electric vehicle capacity continues to increase; the energy storage industry has become a key driver of rising lithium prices, with full orders domestically and internationally, leading companies operating at full capacity, and exports of lithium batteries increasing significantly, providing strong support for the price increase at the fundamental level. Driven by downstream orders, lithium battery companies’ cell production plans in May have significantly increased month-on-month, breaking the sluggish pattern of previous years’ off-season, and the demand rebound has directly pushed lithium prices higher.

Meanwhile, disruptions have appeared on the supply side of lithium carbonate, with short-term raw material supply remaining tight. In the overseas market, Zimbabwe previously implemented export controls on lithium concentrate, and Australia reduced lithium concentrate production, tightening global lithium resource supply; domestically, several lithium mines in Yichun, Jiangxi, have entered the phase of license renewal and suspension of mining, leading to a contraction in regional lithium raw material output, and concerns about short-term supply shortages continue to rise. Coupled with the long-term destocking at low prices in the lithium carbonate industry, the market’s spot circulation remains limited, further boosting lithium prices.

Mokko, chief analyst at Zhenli Research, told Securities Daily that the industry generally expects this year’s total lithium carbonate supply to be about 2.05 to 2.06 million tons, with effective supply between 1.96 and 1.98 million tons. Under the overall balanced supply pattern for lithium carbonate this year, the lithium industry’s production plans in May exceeded expectations, and lithium prices are expected to continue rising.

Industry Chain Prosperity Continues to Recover

The price of lithium carbonate has risen to near 200k yuan/ton, and the prosperity of the lithium battery industry chain continues to recover.

On the upstream resource side, Qinghai Salt Lake Industry Co., Ltd. publicly stated during its earnings presentation that the company’s operations are highly correlated with lithium carbonate price trends. The current price rebound supports revenue and profit recovery in the company’s lithium salt segment, while its main potassium fertilizer business remains stable, solidifying the company’s overall operational foundation.

Zijin Mining Group Co., Ltd. also stated that the company has been continuously expanding into the lithium industry in recent years by developing salt lakes and hard-rock lithium projects domestically and abroad, steadily increasing lithium carbonate capacity and improving the new energy resource map. Based on its experience in mining development and operations, the return of lithium carbonate prices to a reasonable range is conducive to the steady release of benefits from the lithium business segment.

In the midstream materials segment, Shenzhen Defang Nano Technology Co., Ltd. recently stated during its earnings presentation that its main product—lithium iron phosphate cathode materials—is highly sensitive to lithium carbonate raw material prices. The upward movement of lithium prices in the short term brings cost pressure, but with the demand recovery in power batteries and energy storage markets, product prices are adjusting accordingly, and supply-demand improvements in the industry lay a foundation for profit recovery.

In the downstream battery sector, CATL (Contemporary Amperex Technology Co., Limited) said that rising upstream lithium carbonate prices exert cost transmission pressure on battery manufacturing, somewhat increasing production and operation costs. The company leverages its industry scale, long-term contracts, and supply chain integration to hedge against raw material price fluctuations. The industry’s low-end capacity is accelerating its exit, further consolidating the competitive landscape of leading companies.

Overall, the rise in lithium carbonate prices has driven the lithium battery industry chain into a profit recovery cycle. Upstream resource companies benefit most directly, midstream material companies gradually recover profits with market demand, and downstream leading battery companies, relying on their comprehensive strength, smooth out cost fluctuations. The industry as a whole is gradually stabilizing and improving.

Looking ahead at the trend of lithium carbonate prices, Feng Yongqi, senior equipment industry analyst at Wanlian Securities, told Securities Daily that under tight supply and high-growth demand from downstream, lithium prices are expected to remain high and volatile in the short term, leaning towards strength. However, as overseas lithium mine capacity is released and domestic mines resume production in the second half of the year, the supply-demand tension is expected to ease gradually, and prices may retreat from high levels.