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

Author | Wu Xuguang

The global lithium market is迎来 a critical crossroads.

In recent days, lithium carbonate futures prices have continued to decline. As of April 3, the main contract closed at 156,960 yuan/ton, down 1.42%.

Industry insiders believe that the short-term correction in lithium carbonate prices is mainly due to the re-emergence of disruptions in lithium supply. Recently, there have been reports that China Minmetals Resources has obtained export quotas for Zimbabwe lithium concentrate.

In response, a staff member from China Minmetals Resources’ securities department told the “Science and Technology Innovation Board Daily” reporter that the company is still communicating with the Zimbabwean government, with some progress made, but no clear timeline yet. Market expectations generally anticipate that relevant export regulations may be finalized in April.

Even with policy easing expectations in the market, the core pattern of overall tight global lithium supply has not fundamentally changed. Currently, there is a widespread consensus in the industry that lithium supply and demand are tightening.

Morgan Stanley predicts that by 2026, the global lithium market will face a shortfall of 80k tons of lithium carbonate equivalent, while UBS forecasts a shortage of 22k tons; UBS also states that global lithium demand will grow at 14% in 2026 and further increase to 16% in 2027.

▌ Lithium carbonate raw material prices continue to rise

Against the backdrop of shrinking global lithium production, the trend of lithium carbonate prices has attracted market attention. According to third-party agency Mysteel data, as of April 3, the battery-grade lithium carbonate quotation was 158,000 yuan/ton, which has increased by more than 1.2 times compared to the price level of 60,000-70k yuan in the second half of 2025.

Regarding this price trend, Zhang Qian (pseudonym), a senior analyst in the lithium industry in Shanghai, told the “Science and Technology Innovation Board Daily” that the current battery-grade lithium carbonate prices are significantly strong. The recent price increase is mainly driven by the concentrated demand surge in energy storage and new energy vehicle markets in Q4 2025, combined with policy disruptions at the mining end.

On the demand side, one is the main engine driving lithium demand growth—electric vehicles, and the other is the “second growth point”—energy storage, which is boosting lithium demand. Currently, domestic downstream lithium battery demand has shown clear signs of recovery. Industry data shows that in March, the total domestic lithium battery production capacity was about 219 GWh, a 16.5% increase month-on-month, with energy storage cell production accounting for 40.6%, a significant increase from earlier in the year.

On the supply side, a pattern of growth and risk coexist. On one hand, large lithium projects in Australia, Africa, and South America are gradually ramping up, becoming key sources of global supply increase; on the other hand, geopolitical instability, policy changes in resource countries, and tightening environmental and regulatory policies continue to cause ongoing disruptions and uncertainties in actual supply.

In this context, regarding lithium carbonate prices in Q2 and subsequent trends, Zhang Qian further analyzed that the market will still face many disturbances in Q2, with key factors including the launch of new car models in April boosting terminal demand, as well as supply and logistics conditions in Zimbabwe and Australia.

“Based on various factors, the uncertainty in the lithium carbonate market in Q2 is quite high. If Zimbabwean companies continue to face export restrictions, they may experience inventory pressure, which could impact lithium carbonate output. Overall, the supply and demand fundamentals for lithium carbonate in Q2 remain tight, and prices are expected to fluctuate strongly. The specific increase will depend on the dynamic changes of the aforementioned factors,” Zhang Qian added.

Mysteel forecasts that the core fluctuation range for lithium carbonate prices will remain between 130k and 170k yuan/ton.

▌ Responses and strategies of battery industry chain companies

The rise in lithium prices and tightening supply have been fully transmitted across the entire industry chain, prompting adjustments in cost pressures, order structures, and operational strategies of midstream material companies.

It is understood that lithium battery materials mainly focus on upstream lithium resources and four core midstream materials: cathode, anode, electrolyte, and separator.

Regarding supply and price changes of upstream raw materials like lithium carbonate, “Science and Technology Innovation Board Daily” recently inquired with several listed companies in the industry chain. Each company responded with strategies covering resource layout, procurement management, price transmission, and technological iteration to cope with raw material market fluctuations.

In the cathode material sector, Xaw Tung New Energy has been developing ternary materials and lithium iron phosphate (LFP) businesses.

When asked how to manage operational risks from tightening lithium carbonate supply, a staff member from Xaw Tung New Energy’s securities department said that most of the company’s raw materials are sourced domestically, and both production and procurement are currently normal. Additionally, the company’s LFP capacity has been released, mainly used in power batteries.

It is reported that Xaw Tung New Energy started building an LFP production base in Yaan, Sichuan, in 2021, which has now begun bulk supply.

The “Science and Technology Innovation Board Daily” noted that Xaw Tung New Energy currently has ample inventory, with a total of 80k yuan in raw materials, in-process products, and inventory goods by the end of Q3 2025. This high level of inventory helps smooth out the impact of raw material supply fluctuations.

Regarding the rising upstream lithium carbonate prices, a staff member from Xaw Tung New Energy’s securities department said that the company finds it difficult to pass on price increases in the power battery sector, as downstream customers are sensitive to prices. The company needs to upgrade product performance to establish a basis for price negotiations. “We are continuously advancing technological iterations to improve product performance and cost-effectiveness, enhancing market competitiveness. After downstream customer testing and validation, we will negotiate price increases.”

On the supply tightening of upstream lithium raw materials, a person from DeFang Nano’s secretariat said that the company’s lithium procurement channels cover both domestic and international sources, mainly from Jiangxi, Sichuan, and salt lake regions in China, with some overseas resources also in place.

“Although lithium iron phosphate prices are rising, the company’s overall domestic and international orders remain sufficient,” the spokesperson added. They also noted that automakers are just one application area for the company’s LFP products, and demand in energy storage has already surpassed that of power batteries.

In the lithium hexafluorophosphate segment, Multi Fluoro is the main business.

The company’s secretariat said that their lithium carbonate raw materials are mainly purchased domestically and do not involve related imports. Driven by rising prices of lithium carbonate and LFP, downstream cell prices have also increased. The recent rise in lithium hexafluorophosphate prices has been relatively moderate due to earlier significant increases.

“Because lithium battery products have a large unit price base, even a one or two-cent increase in terminal prices can cause noticeable changes in the company’s overall profit,” said an industry insider.

The “Science and Technology Innovation Board Daily” learned that, affected by rising lithium carbonate prices, the average market price of electrolyte industry products is now 30k yuan/ton, up 50% from 20k yuan/ton last year.

Regarding this, Tianqi Materials, a leading electrolyte company, stated that after upstream raw material prices increase, the company’s product prices will follow market trends, and they currently adjust product prices dynamically each month.

In the separator segment, Enjie Shares is a major lithium battery separator supplier. Regarding the rise in lithium carbonate prices, an Enjie spokesperson said that fluctuations in lithium raw material prices have no substantial impact on the company’s costs, only market sentiment disturbances.

“The company mainly produces lithium battery separators, using polyethylene and coating slurry as raw materials, and does not use lithium carbonate. Overall operations are influenced by the supply and demand of downstream batteries, with low correlation to lithium price fluctuations,” the spokesperson further explained.

▌ Export growth: China’s supply chain advantages highlighted

Under the tightening of global lithium resource supply, China’s lithium industry chain’s stability advantage continues to stand out, and related product exports are highly watched by the market.

“We have always been doing exports,” said a person from DeFang Nano’s secretariat. They noted that benefiting from the rapid increase in overseas LFP demand and the accelerated shift of overseas battery companies toward LFP routes, the company’s export business is growing. Additionally, Enjie Shares’ spokesperson said that the company’s overseas operations are stable, with cooperation with several well-known overseas battery manufacturers.

According to customs data, from 2025 to now, exports of leading LFP companies have exploded, with total exports in 2025 reaching about 32.4k tons, a surge of 880% compared to around 3,300 tons in 2024.

Regarding lithium battery material exports, Longpan Technology’s securities department said that currently, domestic LFP technology is more competitive than the Japanese-Korean ternary route. Coupled with geopolitical factors and overseas policy restrictions, it is more difficult for overseas clients like LG and Ford to switch to LFP routes, requiring them to purchase related products from Chinese companies with overseas capacity.

It is reported that Longpan Technology is currently expanding LFP capacity in Indonesia, effectively meeting overseas demand and driving overseas business growth. The first phase with a 30,000-ton capacity has been put into operation, and the second phase with 90k tons will be commissioned this year. Once fully built, the total capacity will reach 120k tons.

Similarly, companies like Wanrun New Energy and Tianqi Materials are also advancing overseas capacity layouts.

Wanrun New Energy’s secretariat said that to accelerate overseas market expansion, the company established a subsidiary in South Carolina, USA, with a planned annual capacity of 50k tons of LFP. “The project is still under construction and has not yet been put into operation.”

On February 10, Tianqi Materials announced that its electrolyte project in Morocco officially broke ground. The project has a total investment of 22k Moroccan dirhams (about $280 million), and upon completion, it is expected to have an annual production capacity of 150k tons of electrolyte and core raw materials.

Regarding future overseas market expectations, industry experts generally believe that on one hand, demand for household, industrial, and data center energy storage remains strong; on the other hand, AI computing power and big data industries further boost related demand.

CITIC Securities research reports estimate that by 2026, global lithium battery demand will reach 3,065 GWh, a year-on-year increase of 34%.