10 months surge of 120%! Lithium prices reach a crossroads—how should industry chain companies respond?

The global lithium market has reached a critical crossroads.

Over the past several days, lithium carbonate futures prices have continued to fall back. As of April 3, the main contract closed at 156,960 yuan per ton, down 1.42%.

Industry insiders believe that the short-term pullback in lithium carbonate prices is mainly driven by the re-escalation of disturbances on the lithium supply side. Recently, the market reported that MinMetals Resources has obtained an export quota for lithium concentrate from Zimbabwe.

In response, a staff member from the securities department of MinMetals Resources told reporters from the Kechuangban Daily that the company is still communicating with the local government in Zimbabwe and has made some progress, but there is no clear timetable as of now. The market generally expects that the relevant export implementation details will be finalized and rolled out in April.

Even if there are favorable expectations of policy easing, the core overall situation of globally tight lithium supply has not fundamentally changed. At present, the industry has reached a broad consensus that supply and demand in the lithium market are tightening.

Morgan Stanley forecasts that in 2026 the global lithium market will face a deficit of 80k tons of lithium carbonate-equivalent; UBS predicts a shortfall of 22k tons. UBS also states that in 2026, global lithium demand growth will be 14%, and in 2027 it will further rise to 16%.

Lithium carbonate raw material prices continue to rise

Against the backdrop of shrinking global lithium mine output, the trend in lithium carbonate prices has drawn close attention from the market. According to data statistics from third-party firm Mysteel, as of April 3, the quoted price for battery-grade lithium carbonate is 158,000 yuan per ton. Compared with the 60,000–70k yuan price range in the second half of 2025, it has already achieved more than 1.2x growth.

In response to this price trend, Zhang Qian (a pseudonym), a senior analyst in Shanghai’s lithium industry, told reporters from the Kechuangban Daily that current battery-grade lithium carbonate prices are showing a clearly stronger-than-usual performance. The rise in prices this round is mainly driven by a concentrated surge in demand from the energy storage and new energy vehicle markets in the fourth quarter of 2025, together with policy-related disturbances on the mining side.

On the demand side, on one end, electric vehicles are the main engine driving lithium demand growth; on the other end, energy storage is the “second growth point” that pulls lithium demand. In China, downstream lithium battery demand has already shown clear signals of a rebound. Industry data shows that in March, the total production scheduling volume in China’s lithium battery market was about 219 GWh, up 16.5% month over month. Of this, the share of energy storage cell production scheduling increased to 40.6%, which is noticeably higher than at the beginning of the year.

On the supply side, there is a pattern in which growth and risks coexist. On one hand, major lithium projects in Australia, Africa, and South America are gradually coming online and ramping up, becoming a source of incremental global core supply; on the other hand, operational risks stemming from geopolitical instability, changes in policies in resource countries, and tighter environmental protection and regulatory policies will continue to create ongoing disruptions and uncertainty to actual supply.

Against this backdrop, when assessing lithium carbonate prices in the second quarter and the subsequent outlook, Zhang Qian further analyzed that there are still many disturbance factors in the lithium carbonate market in the second quarter. Key points to watch include the impact of new vehicle launches in April on terminal demand, as well as lithium mine supply in Zimbabwe and Australia and logistics and transportation conditions.

“Judging by the combined effects of various factors, uncertainty in the lithium carbonate market in the second quarter will be high. If export restrictions related to Zimbabwe’s lithium mines persist, relevant companies may face inventory pressure on the mining side, which in turn could affect lithium carbonate output. Overall, the supply-demand fundamentals for lithium carbonate in the second quarter remain tight, and prices will maintain a relatively strong sideways-to-firm pattern; the specific upside will need to change dynamically according to the factors mentioned above.” Zhang Qian added.

According to Mysteel’s forecast, the main core fluctuation range for lithium carbonate prices is expected to remain between 130k and 170k yuan per ton.

Response and strategies from companies across the lithium battery industrial chain

Rising lithium prices and tightened supply have been fully transmitted across the entire industrial chain. Cost pressure, order structure, and operating strategies for midstream material companies are being adjusted accordingly.

It is reported that lithium battery materials are mainly concentrated in upstream lithium resources and four core midstream materials: cathode materials, anode materials, electrolyte, and separators, among other links.

Regarding changes in upstream material supply and pricing, such as lithium carbonate, the Kechuangban Daily reporter recently verified with several listed companies in the industrial chain and learned that each company responds to volatility in the raw material market through different approaches, including resource layout, procurement management, price transmission, and technological iteration.

In the cathode material segment, Xiamen Tungsten New Energy has stepped up efforts in both ternary materials and lithium iron phosphate business.

When asked how to manage operating risks arising from tightening lithium carbonate supply, a staff member from the securities department of Xiamen Tungsten New Energy said that most of the company’s raw material procurement comes from within China, and both production and raw material procurement are currently operating normally. In addition, the company has released some lithium iron phosphate capacity, which is mainly used in the power battery segment.

据悉, Xiamen Tungsten New Energy began constructing a lithium iron phosphate production base in Yaan, Sichuan in 2021, and it has already started bulk supply.

The Kechuangban Daily reporter noticed that Xiamen Tungsten New Energy currently has relatively sufficient inventory. As of the end of the third quarter of 2025, the sum of its raw materials, work-in-progress, and inventory goods, among others, was 80k yuan, which is at a high level. To a certain extent, this high inventory helps smooth the impact caused by volatility in raw material supply.

Regarding upstream lithium carbonate price increases, a staff member from the securities department of Xiamen Tungsten New Energy said that in the power battery field, it is difficult to transmit prices; downstream customers are more sensitive to pricing. The company needs to upgrade product performance to have a foundation for price increase negotiations. “Currently, we are continuously推进技术迭代, improving product performance and cost-effectiveness, and strengthening market competitiveness. After downstream customers complete testing and verification, we will then negotiate the matter of price increases.”

Regarding tightening upstream lithium carbonate raw material supply, a person from the company’s board secretary office at Defang Nano said that the company’s procurement channels for lithium raw materials cover both domestic and overseas sources. Domestically, it mainly comes from the Jiangxi, Sichuan, and Salt Lake areas, while it also has some overseas resource allocations.

“Although the price of lithium iron phosphate is rising currently, overall our orders are sufficient at home and abroad.” the person from Defang Nano’s board secretary office added. The automakers are only one of the application areas for the company’s lithium iron phosphate products; the growth in demand in the energy storage field is already higher than that in the power battery field.

In the lithium hexafluorophosphate (LiPF6) segment, Duofoto is mainly engaged in lithium hexafluorophosphate.

A person from the board secretary office of the company said that the company’s lithium carbonate raw materials mainly rely on domestic procurement and do not involve relevant import businesses. Driven by the rise in prices of lithium carbonate and lithium iron phosphate, downstream cell prices have also increased accordingly. Because lithium hexafluorophosphate saw a relatively large increase earlier, the increase in this round is relatively moderate.

“The unit price base for lithium battery products is relatively large. Even if the terminal price is adjusted up by just one or two cents, it will still lead to a relatively noticeable change at the company’s overall profit level.” This was stated by an industry insider.

The Kechuangban Daily reporter learned that, due to the rise in lithium carbonate prices, currently the industry-wide average market price in the electrolyte sector is 30k yuan per ton, up from 20k yuan per ton in the same period last year, representing a 50% increase.

In response, a person from the securities department of Tianci Materials, a leading company in the electrolyte industry, said that after upstream raw material prices rise, the company’s product prices will follow the market. Currently, the company adjusts product prices dynamically every month.

In the separator segment, Enjie Co., Ltd. is a lithium battery separator supplier in the industry. Regarding the increase in lithium carbonate prices, a person from Enjie’s board secretary office said that fluctuations in lithium raw material prices have no substantive impact on the company’s cost side and exist only as disruptions from market sentiment.

“Our main business is lithium battery separators. Our raw materials are polyethylene and coated slurry materials; we do not use lithium carbonate. Overall operations are influenced by downstream battery supply and demand as a whole, and the correlation with lithium price fluctuations is relatively low.” the person from Enjie’s board secretary office further said.

High export growth: China’s supply chain advantages stand out

Against the backdrop of a tightening global supply of lithium resources, China’s lithium battery industrial chain continues to highlight its stability advantages, and the export performance of related products has also drawn high attention from the market.

“We have always been doing exports.” A person from Defang Nano’s board secretary office said that benefited from the rapid rise in overseas demand for lithium iron phosphate, alongside overseas battery companies accelerating their shift to lithium iron phosphate routes, the company’s export business has shown a growth trend. In addition, a person from Enjie’s board secretary office said that the company’s overseas business layout is stable, and it collaborates with multiple well-known overseas battery manufacturers, among others.

According to data from the General Administration of Customs, from 2025 to date, the top lithium iron phosphate producers’ exports have shown explosive growth overall. In 2025, the total export volume was about 32.4k tons, compared with approximately 3,300 tons in the same period of 2024, a year-on-year surge of 880%.

Regarding lithium battery material exports, a staff member from the securities department of Longpan Technology said that at this stage, China’s lithium iron phosphate technology is more competitive than the ternary routes in South Korea and Japan. Combined with geopolitical factors and constraints from overseas policies, it is difficult for overseas customers such as LG and Ford to switch to lithium iron phosphate routes. Therefore, they need to purchase relevant products from Chinese companies that have overseas capacity in place.

据悉, Longpan Technology currently has lithium iron phosphate capacity set up in Indonesia, effectively capturing overseas demand and boosting overseas business growth. Currently, the first phase base in Indonesia with 30,000 tons of capacity has already been commissioned, and the second phase with 90k tons of capacity will be commissioned this year. After the entire project is completed, total capacity will reach 120k tons.

Likewise, companies such as Wanrun New Energy and Tianci Materials are also advancing overseas capacity layout.

A person from Wanrun New Energy’s board secretary office said that to accelerate development in overseas markets, the company has established a subsidiary in South Carolina, USA, with a total plan to build 50k tons of lithium iron phosphate capacity per year. “In terms of project progress, this project is currently still under construction and has not yet been commissioned.”

On February 10, Tianci Materials issued an announcement stating that the company’s Morocco electrolyte project officially started. The project’s total investment is 22k Moroccan dirhams (approximately USD 280 million). After completion, it is expected to form integrated production capacity with an annual output of 150k tons of electrolyte and key raw materials.

When discussing expectations for future overseas markets, industry insiders generally believe that on the one hand, overseas home energy storage, commercial and industrial energy storage, and data center energy storage demand are all relatively strong; on the other hand, AI computing power and the big data industry have further driven related demand.

A research report from China CITIC Securities predicts that in 2026 global lithium battery demand will reach 3,065 GWh, up 34% year over year.

（Source: Caixin Leju）