Lithium market dynamics: Supply-demand tensions and evolving price trends amidst global and domestic shifts

Since November, driven by strong demand from the energy storage sector, downstream material manufacturers have been operating at historically high utilisation rates, leading to a widening monthly supply gap for lithium carbonate. Prices surged significantly, with futures rising from around RMB 80,000 per tonne to over RMB 100,000 per tonne, marking substantial volatility. However, recent signs of slowing weekly destocking, coupled with rumors of the potential reopening of CATL, have slightly tempered bullish sentiment, and prices have re-entered a range-bound consolidation phase. At this juncture, market outlook diverges significantly. This article will analyse key market contradictions based on recent supply and demand data from industry surveys.

Supply Side:

In November 2025, the production of lithium carbonate reached 93,800 tonnes, marking a month-on-month increase of 5.1 per cent, according to Mysteel's data. During the month, integrated large-scale producers in Jiangxi Province and a few lepidolite production lines maintained high operating rates through tolling arrangements, while some manufacturers in Sichuan Province reduced output due to production line maintenance. Meanwhile, most other producers maintained stable operations. In East and North China, plant operating rates varied with both increases and decreases. Production in Qinghai remained stable, while new production lines in Xinjiang continued ramping up. Additionally, some mainstream producers in the recycling sector reduced output due to technical upgrades or maintenance shutdowns. Overall, domestic supply in November continued to show an upward trend.