Lithium Retreats Toward 3-Month Low

Lithium carbonate prices fell To CNY 154,000 in mid-July, testing their lowest since March, as signs of higher supply offset evidence of strong demand. CATL's Jianxiawo mine, among the largest in the world, cleared security permits to restore activity following its prolonged suspension. On top of that, higher lithium prices since the start of the year drove Australian miners to restore operations. 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. Still, industry reports in China 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, even as EV orders in China slow.

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, 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.