Lithium Rebounds from 2-Month Low

Lithium carbonate rebounded to CNY 165,000 per tonne from the three-month low of CNY 151,750 on June 29th as signs of strong demand outweighed recent upgrades to global supply. Industry reports in China, the world's largest consumer by far, indicated that competition between EV battery producers to retain market share drove companies to increase their production schedules, leading to higher lithium sourcing. On top of that, accelerating demand for energy storage systems magnified lithium consumption consumption, even as EV orders in China slow. Energy storage systems are procured by Beijing to manage data center power loads that are in growing demand due to AI compute expansions, in addition to the wave of grid integration from growing renewable power sources. Still, ample supply capped a sharper rally. CATL's large Jianxiawo mine cleared security permits to restore activity following its prolonged suspension, and higher lithium prices drove Australian miners to restore operations.

Lithium carbonate prices in China dropped to CNY 151,750 per tonne, the lowest level in three months, following speculation that one of the world’s largest lithium mines could resume operations soon. Contemporary Amperex Technology’s Jianxiawo mine in Jiangxi province was suspended last year due to permitting issues, but a recent government notice regarding a preliminary land assessment has fueled expectations that the site could restart in the second half of 2026. However, the notice did not confirm any reopening plans and appears to be a procedural step related to land-use approval. Analysts said the market has already priced in the possibility of a near-term restart, despite limited confirmation. They warned that a potential return of Jianxiawo output could weigh on prices, but still expects lithium supply and demand conditions to remain relatively tight as significant new battery capacity is scheduled to come online in the third quarter.

Lithium carbonate prices in China rose to CNY 169,000 per tonne from the near two-month low of CNY 163,000 as seasonal inventory rebuilding drove consumers to place bids on the metal. Still, futures remained well below the two-and-a-half year high of CNY 200,00 from mid-May amid easing concerns of tight supply and signs of softening demand. Mineral Resources will restart its Bald Hill lithium mine following an 18-month suspension, while Core Lithium restarted its Finniss project, making up for shortages elsewhere. Zimbabwe imposed export quotas for lithium concentrates and a full export ban to start next year, and stated exports would be allowed for processed lithium to stimulate the investment in local processing. Meanwhile, new data painted a mixed picture for electric vehicle demand. New energy vehicle sales in China fell by 7.5% annually to 950,000 units in May, although the market share for the sector rose to 62.9% in the period.