Author: Nanxi, Editor: Shuijing
Amid fierce market gaming and competition, cyclical fluctuations driven by the shift in supply and demand dynamics are continuously and profoundly impacting the global lithium industry.
In the first half of the year, the lithium carbonate market experienced a complete cycle of "rapid surge—peak—sharp decline—bottoming out." Supported by better-than-expected demand and supply-side disruptions at the beginning of the year, prices fluctuated and strengthened. In May, prices once surged to 200,000 RMB/ton. However, after hitting this peak, the market saw a rapid and significant pullback, primarily due to two factors: first, the rally in April and May was essentially driven by trading expectations, and the supply disruptions ultimately failed to materialize; second, off-balance-sheet inventory moved onto the balance sheet, coupled with the continuous accumulation of warehouse receipts at the Guangzhou Futures Exchange (GFEX), prompting the market to recognize the off-balance-sheet supply and inventory issues of lithium carbonate. From late May to the present, the market has corrected its previous misjudgment of inventory through price declines, compounded by ongoing disruptions from news related to the Jianxiawo mine, causing the main contract to briefly fall to around 150,000 RMB/ton.
According to our statistics, the average spot price of battery-grade lithium carbonate in China during the first half of the year was 163,500 RMB/ton, a year-on-year increase of 132.2%. According to the earnings forecast released by Tianqi Lithium (002466.SZ), a leading lithium mining company, on the evening of July 14, the company expects to achieve a net profit attributable to shareholders of 2.85 to 4.25 billion RMB in the first half of the year, representing a year-on-year growth of approximately 3276% to 4935%.
From the perspective of core structural changes on the global supply side, there is a divergent trend characterized by "tightness at the mine end and no tightness at the salt lake end." The actual year-on-year growth of domestic lithium carbonate production has been quite considerable, with output reaching approximately 622,000 tons in the first half of the year, a year-on-year increase of about 46% (according to SMM data).
However, three external events (the Zimbabwe export ban, the Australian diesel crisis, and the Jiangxi lepidolite incident) have continuously catalyzed expectations of supply contraction. Among them, the Zimbabwe mining ban represents the largest expected shock, with arrivals in the first half of the year significantly lower than in the same period of 2025. The limited opening under the "quota system" retains ongoing uncertainty. Due to Australia's high dependence on external diesel sources, different mineral types do not hold the same status in resource allocation. Lithium mines rank after coal, iron ore, and gold in Australia's supply priority list and are not the primary target for guaranteed supply. The market worries that once a crisis occurs, it will directly shatter expectations of stable supply growth from Australia in 2026. The suspension and compliance rectification of Jiangxi lepidolite have led to a continuous reduction in the lepidolite route, and the compliance renewal of lithium mining licenses has reached a critical juncture.
In fact, none of the three shocks fully materialized in the first half of the year, but the market formed a strong narrative of "tightness in the distant future" and pushed it to price extremes in April and May. This is the fundamental mechanism by which the supply side drives significant price overshooting.
The 24Chao Industry Research Institute analyzes that the gap between "paper supply" and "landed spot goods" may be one of the important trading themes in the market in the second half of the year.
In fact, short-term fluctuations in lithium prices are almost impossible to predict, but long-term trends inevitably depend on changes in supply and demand dynamics. This article aims to systematically review the supply and demand landscape in the second half of the year and discuss with readers the question of "whether lithium prices will continue to rise or enter a high-level fluctuation range in the second half of the year." It is intended to spark discussion and is for reference only. Readers are welcome to supplement, correct, or even criticize.
(Special Note: The data sources for this article include public information such as Antaike's "Analysis and Outlook of the Lithium Market in the First Half of 2026," Huatai Futures Lithium Carbonate Weekly Report, SMM, Baichuan Data, China Power Battery Alliance, CNESA, IDC, and company announcements. It only represents personal research judgments and does not constitute any investment advice. The market changes rapidly; readers are advised to make prudent decisions based on their own circumstances.)
Global Lithium Resource Supply
According to our previous analysis, on the supply side in 2026, due to capacity expansion projects entering the late stage of production and the resumption of some projects driven by rising prices, there will still be a growth rate of 27%. However, due to insufficient new projects after 2027 and increased disruptions in overseas lithium mine production and exports, 2026 may be the last peak of production increase in this cycle. The supply growth rate may fall back to 12% in 2027 and is expected to decline further in 2028. 2026 is the last peak of concentrated capacity release in this cycle. According to the latest forecast by Antaike, the global lithium carbonate supply will reach approximately 2.15 million tons LCE for the whole year, with an increment of about 470,000 tons LCE.
Looking first at the Australian market, the largest source of incremental supply—Greenbushes CGP Phase 3 (with an annual capacity of 520,000 tons of lithium concentrate, commissioned at the end of 2025)—has suffered a double blow. First, the ramp-up progress fell short of expectations, and IGO has lowered its FY26 production guidance from 1.5 to 1.65 million tons to 1.375 to 1.425 million tons. Second, a fire broke out at CGP3 on June 9, destroying the main conveyor belt and key electrical equipment, with an estimated repair cycle of up to 6 months. It is estimated that the fire will lead to a further reduction of about 11% in Greenbushes' annual production, resulting in a loss of over 20,000 tons of LCE.
Stimulated by high prices, some suspended mines in Australia have clarified their resumption plans: Ngungaju (Pilgangoora processing plant) plans to resume production in July 2026; Bald Hill (MRL) plans to resume production in July 2026; and Finniss (Core Lithium) plans to produce the first batch of concentrate in Q42026.
The combined capacity of the three resuming lithium mines is 63,000 tons, but the key lies in the "time lag"—resumption is not an overnight process. From mine resumption to concentrate shipment, port processing, and lithium carbonate production, it usually takes a transmission cycle of 3 to 6 months. This means that the actual market supplementation from the production of mines resuming in Q3 will not be reflected until Q4 or even Q1 2027.
In contrast, the African region is becoming an important growth pole for global lithium resource supply. Currently, Africa is the second-largest source of new global lithium resource supply in 2026 (+123,000 tons), with production expected to reach 328,000 tons LCE (Antaike data). Chinese enterprises control over 70% of the projects in production and under construction, and African lithium concentrate accounts for over 43% of China's imports.
Zimbabwe, the largest lithium mine supplier, completely banned lithium ore exports on February 25. The essence of the policy still stems from resource nationalism—promoting the upgrading of the domestic mining industry and keeping processing profits within the country. Zimbabwe exported about 1.128 million tons of lithium concentrate in 2025, accounting for about 15% of China's lithium concentrate imports. The implementation of the ban directly impacted global supply expectations. Relevant enterprises did not resume exports until April 13 by obtaining a half-year quota, with the core condition being a written commitment to build local processing plants. Mine production did not stop during the ban. After the lifting, enterprises accelerated the shipment of previously stockpiled ore. The first batch was reshipped in mid-May, and shipment volumes gradually recovered after June, with arrivals expected in July and August.
Currently, Huayou's 50,000 tons/year lithium sulfate project at the Arcadia mine in Zimbabwe has been commissioned in Q1. China Mining's 30,000 tons/year project at the Bikita mine is expected to be commissioned in Q2 2027. Yahua Group is planning a 75,000 tons/year project, while Shengxin has not yet disclosed a clear timetable or investment plan for the construction of a lithium sulfate plant. The short-term situation has temporarily subsided, but long-term policy risks remain. The concentrate export ban in January 2027 is a substantial long-term constraint.
In addition, Zijin's Manono project in the Democratic Republic of the Congo has been delayed from the original plan of June to the end of 2026 for commissioning, and political changes in Mali have not yet affected lithium mine operations.
Returning to the domestic market, structural adjustments are the most profound. Among them, Jiangxi's mica mines are undergoing the deepest adjustment in this cycle. In the first half of the year, mines such as the Shuinan section suspended production for license renewal, and the Jianxiawo mine became the biggest source of market sentiment disruption. Regarding Jianxiawo, news on June 29 confirmed that all production-related certificates had been obtained, and the work safety license was approved on the same day. However, according to the actual implementation progress of the industrial chain, the mine will only carry out preliminary preparations such as personnel training and earthwork stripping in 2026, and will not be able to produce lithium concentrate, which will not affect the supply and demand balance in the second half of the year at all. Even if it resumes smoothly in the future, factors such as limited tailings pond processing capacity, environmental protection constraints, equipment debugging, and the actual ramp-up pace still have significant uncertainties. Zheshang Securities estimates that Jianxiawo's share of global lithium carbonate demand will decrease year by year from 8.4% in 2024 to 6% in 2025 and 4.6% in 2026, reducing its impact on the market. Previously, the market excessively exaggerated the bearish impact of resumption, pricing in pessimistic expectations in advance.
More noteworthy is that several mica mines, including Huaqiao Dagang, Huaqiao Baishicun Huashan, Tong'an, and Dongcao Dingxing, have received assessment reports on the transfer income of resource reserves. They are expected to enter the process of suspending production for license renewal in the second half of the year, lasting at least half a year. This means that the supply of Jiangxi mica will not only be difficult to grow in the second half of the year but will also face the risk of further contraction.
Regarding the Qinghai-Tibet salt lakes: Salt Lake shares' 40,000-ton project in Chahan, Tibet Mining's Zhabuye, and Zijin's Laguo Cuo are all steadily ramping up production. The first phase of the 50,000-ton Zangge Mamicuo project is expected to be commissioned in Q3, contributing 20,000 to 25,000 tons this year. The overall production release is in line with expectations. On the spodumene side, the incremental supply mainly comes from the ramp-up of Guocheng Mining's Dangba project and Xinjiang Nonferrous Dahongliutan, while Dazhong Mining's Jiada mine is expected to be commissioned by the end of the year.
In summary, the 470,000 tons of new global supply added this year on paper seems abundant, but after deducting various disruptions, the actual effective supply may be 100,000 to 150,000 tons less than the paper figure. This includes an estimated 20,000 tons impact from the Greenbushes fire; a 30,000 to 40,000 tons impact from the two-month window period of the Zimbabwe mining ban; an approximately 30,000 to 50,000 tons impact from the suspension of Jiangxi mica for license renewal; a 20,000 to 30,000 tons impact from the delay of projects such as Manono; and the "time lag" in the resumption of Australian mines affecting the supply lag in Q3-Q4.
Analysis of Global Lithium Resource Demand
Currently, power batteries (including those for NEVs (New Energy Vehicles) and two-wheelers) and energy storage batteries are the two largest areas for future lithium resource demand. Grasping the demand changes in these two areas almost means mastering the direction and trend of future lithium prices.
Looking first at power batteries, according to TrendForce statistics, the total global sales of NEVs (including BEVs, PHEVs, and hydrogen fuel vehicles) in the first quarter of 2026 were 3.94 million units, a slight year-on-year decrease of 2%. Data from the China Passenger Car Association (CPCA) shows that retail sales of NEVs from January to May fell by 15.1% year-on-year. Its sustained growth momentum is facing severe challenges.
On June 13, William Li, founder and chairman of NIO, issued an industry warning at the Chongqing Auto Forum: "This is the most difficult year since I entered the automotive industry. We need to be mentally prepared for the entire industry to drop by 15% to 20%."
In contrast, in 2026, energy storage surpassed NEVs (power batteries) for the first time, becoming the primary growth engine for lithium demand and leaping to become the most critical variable in the industry. This is the part this article most wants to focus on.
According to data from authoritative institutions, from 2020 to 2025, the annual newly installed capacity of global new energy storage rose from 13 GWh to 306 GWh, a growth of 23.54 times.
In the first half of 2026, the global energy storage market prosperity exceeded expectations, with Chinese energy storage cells comprehensively controlling the global discourse with a shipment share of over 85%. The driving force is no longer a single region but has formed a resonance pattern of high prosperity in mature markets in Europe and the US overlapping with multi-point explosions in emerging markets in the Middle East, Australia, Latin America, and Africa.
Looking ahead to the whole year, integrating analyses and forecasts from various institutions, we believe that the global energy storage cell shipments in 2026 will be approximately 1,080 GWh, a year-on-year growth of about 70%. Among them, the second half of the year will be the strongest shipment window of the year. Global energy storage demand is not a concern; the risk lies in the execution pace rather than the total volume. According to calculations, overseas shipments in 2026 are expected to reach 625 GWh, with Q3-Q4 being the peak shipment period—driven by the zeroing out of export tax rebates at the end of the year, which drives front-loading of installations, coupled with centralized ordering and stocking by terminal projects in August and September. Overseas energy storage will drive a lithium carbonate demand of about 169,000 tons LCE (overseas energy storage annual shipment forecast × 0.27 kg/kWh theoretical lithium carbonate usage for LFP cathode materials).
Looking ahead, accompanied by the extreme fission of the global energy landscape and application scenarios, global energy storage may enter an even more vigorous growth cycle.
Minmetals Securities analyzes that the peak of annual newly installed capacity for global wind, solar, and energy storage (utility-scale storage) will appear around 2035. The peak of annual newly installed energy storage capacity is expected to exceed 1.5 TWh, with 8.6 times of growth space remaining before reaching the installation ceiling, and the peak shipment volume is expected to exceed 2.0 TWh. The CAGR of global newly installed energy storage from 2024 to 2035 is about 21.3%.
In addition, according to the latest analysis report by CSC Financial, using residential electricity prices as a reference indicator for the economic payback period of household energy storage, considering the higher electricity demand in developed countries, high electricity price areas, villas, and power-deficient regions at 20 kWh/household, and in emerging markets and medium-to-low electricity price areas at 5-10 kWh/household, with the average price of household energy storage products in developed countries calculated at 1.5 RMB/Wh, and in developing and underdeveloped countries at 1.2 RMB/Wh, the corresponding cumulative global household energy storage installation capacity can reach 2,842 GWh.
According to its preliminary statistics, as of 2025, the cumulative global household energy storage installation capacity is about 79 GWh. Based on the long-term cumulative installation capacity of household energy storage, the corresponding penetration rate is about 2.8%, indicating a very broad prospect.
From the perspective of national development potential, the household energy storage market space in 9 countries/regions is over 100 billion RMB, while China is the only country with a market potential of over 1 trillion RMB, with a household energy storage market space reaching 1.61 trillion RMB; the United States is second with 855 billion RMB; and Japan is third with a market space of 236.2 billion RMB.
CSC Financial analyzes that global commercial and industrial (C&I) energy storage has more growth potential. The main reasons are: on the one hand, countries with a higher proportion of green power generation are gradually introducing and improving electricity marketization mechanisms, broadening the economics of C&I energy storage through peak-valley price spreads and ancillary services, stimulating energy storage configuration to alleviate grid absorption pressure; on the other hand, the power supply and demand gap in high energy consumption application scenarios such as AI (Artificial Intelligence) data centers and mining areas is gradually increasing, prompting various commercial and industrial owners to increase the proportion of self-owned energy storage supporting facilities, driving high demand growth.
Referring to the electricity consumption of commercial and industrial sectors in various countries globally, and comprehensively considering the penetration rate and power generation duration, CSC Financial estimates that the long-term cumulative installed capacity will exceed 4,592 GWh, with a market space of about 4.7 trillion RMB, corresponding to a penetration rate of less than 1%. By anchoring the electricity demand of commercial and industrial sectors in various countries, assuming that the proportion of enterprises installing C&I energy storage is about 50% and the discharge duration is 4 hours, the long-term cumulative capacity demand for C&I energy storage is expected to reach 4,592 GWh, with a market space of about 4.7 trillion RMB.
According to our statistics, as of the end of 2025, the cumulative global C&I energy storage installed capacity is about 42 GW, corresponding to a penetration rate of about 0.9%.
More importantly, under the extreme fission of global application scenarios, energy storage applications are no longer limited to the traditional "source-grid-load." Incremental application scenarios such as computing power centers, ultra-fast charging networks, and off-grid microgrids all bring huge energy storage demand.
A set of data is enough to show the growth potential of energy storage in the AIDC (AI Data Center) field. Due to the characteristics of AI data centers, such as extremely high power density, severe load fluctuations, and strict reliability requirements, according to NVIDIA's 800V high-voltage DC power supply architecture solution released in October 2025, energy storage is expected to become the standard for the new generation of power supply architecture in AIDCs.
According to IEA forecasts, the total scale of global data centers (traditional + AIDC) is expected to reach 226 GW by 2030, including 100 GW in the US, 67 GW in China, and 27 GW in Europe. Then, the annual new scale of global data centers will rise from 14 GW in 2024 to an average of 23 GW per year over the next five years.
According to Minmetals Securities' calculations, the incremental energy storage demand brought by AI is expected to increase the CAGR of energy storage from 21.3% to 24.0% between 2024 and 2035, and raise the peak energy storage demand in 2035 from 1.5 TWh to 1.9 TWh.
In addition, according to our market research, the demand for energy storage in microgrid scenarios such as mines, oil fields, salt lakes, and islands is also continuously increasing. According to Market.us forecasts, the global microgrid battery energy storage market will grow rapidly from $2.1 billion in 2024 to $8.9 billion in 2034, with a CAGR expected to reach 15.6% from 2025 to 2034.
In addition, accompanied by the acceleration of global vehicle electrification, huge energy storage demand is also hidden under the fast-charging network. According to data from the State Grid Energy Research Institute, by the end of 2025, the total number of public charging piles globally was nearly 7 million, with over 1.6 million newly added, a year-on-year growth of over 30%. We assume that even if 10% of public charging piles complete the integrated storage and charging transformation, it will release nearly 260 GWh of energy storage demand.
In the foreseeable future, globally, there will definitely be more and more new application scenarios for energy storage. It is no exaggeration to describe it as "a thousand scenes and a thousand faces." Every new application scenario contains growth opportunities worth tens of billions or even hundreds of billions of RMB.
Trend and Price Analysis
The accumulation of lithium carbonate inventory is an important indicator of industry inventory. Currently, the social inventory of lithium carbonate shows a continuous destocking trend, while futures warehouse receipts have hidden concerns at high levels.
According to SMM statistics, the social inventory of lithium carbonate has been destocked for five consecutive weeks, with the destocking speed doubling in the second week of July. As of July 9, the small-sample social inventory of lithium carbonate dropped to 92,200 tons, with a weekly destocking of 2,338 tons, nearly doubling the previous week (-1,239 tons), creating the largest single-week drop in the past five weeks. Since the high point on June 11 (97,800 tons), the cumulative destocking is about 5,600 tons, a decrease of 5.7%. The large-sample inventory was 127,800 tons as of July 2, with a cumulative destocking of about 15,000 tons since the beginning of the year. Currently, the global lithium inventory days are about 23.2 days, a year-on-year decrease of nearly 46%, which is already at a historically low level.
According to SMM statistics, the inventory structure of each link shows significant differentiation. By link, smelter inventory has dropped to about 12,400 tons, with a cumulative two-week decrease of 18.7%, and inventory days are only 3 days, approaching the historical lowest range; the trader link has seen a cumulative two-week destocking of 15.8%, also in a state of deep destocking. Downstream cathode material plants stocked up at low prices in the first week of July (+6.6%), but fell back in the second week (-2%), which belongs to on-demand procurement rather than trend-based hoarding. This structure of "continuous passive destocking upstream and pulse-like restocking downstream" indicates that destocking is real terminal consumption in the industrial chain, rather than a simple transfer of inventory between links.
By dissecting the data, it is found that the GFEX warehouse receipts remain unmoved, constituting the biggest structural contradiction at present. As of early July, the registered warehouse receipts for lithium carbonate at GFEX were still as high as about 48,300 to 49,300 tons, only decreasing by over 300 tons compared to the end of June, with extremely limited destocking. July is the month of concentrated cancellation of warehouse receipts. It is expected that over 40,000 tons of warehouse receipts will expire at the end of the month and cannot be re-registered, but the cancellation progress is much slower than market expectations. The divergence between continuous destocking on the industrial side and the high level of exchange warehouse receipts has directly suppressed the market—the selling pressure formed by short sellers holding warehouse receipts is the core reason why prices cannot follow the fundamentals this week. The actual progress of the cancellation window at the end of July will determine whether the futures-spot price spread can converge.
Currently, prices and fundamentals show a short-term divergence, but medium-term support remains. On July 9, the spot price fell to 158,500 RMB/ton (week-on-week -2.5%). The main reason for the pullback is not inventory deterioration, but the concentrated release of event-driven bearish factors such as news of Jianxiawo's resumption, short-term high pressure of warehouse receipt inventory, and the arrival of Zimbabwe goods at ports.
The direction of the supply and demand gap for the whole year of 2026 is established, and the global lithium market is in a state of net destocking. Considering that the effective supply is lower than the paper figure, the actual degree of supply and demand tightness may exceed current market pricing.
We predict that the probability of lithium carbonate prices breaking below 150,000 RMB is limited. The acceleration of warehouse receipt cancellation and the start of peak-season restocking will become catalysts for the next round of price recovery. The supply and demand will maintain a tight balance throughout the year, and it is expected that lithium carbonate prices will remain in the range of 150,000 to 200,000 RMB/ton in the second half of the year.
In summary, the 24Chao Industry Research Institute analyzes that the lithium price in 2026 is more likely to replicate the "direction" of 2021 rather than the "height" of 2022—that is, we have reason to expect a trend-based price increase, but we should not harbor illusions about "recreating the 500,000 RMB era." There are three core reasons:
First, the lithium price bull run in 2021 largely benefited from the extreme panic sentiment downstream of having no lithium available—although current inventory is being destocked, the absolute volume is not extremely scarce, with social inventory still near 100,000 tons and futures warehouse receipts around 50,000 tons;
Second, the new supply in this round mainly comes from mines and salt lakes with clear and known marginal costs. Once the price reaches their resumption threshold, the response speed will be faster than the previous round—the resumption of the three major Australian mines in Q3, the continuous landing of incremental supply in Africa, and the intensive commissioning of new salt lake projects in South America;
Third, the core driving force of demand in this round is energy storage rather than pure power, and the price tolerance of energy storage customers is lower than that of electric vehicles, naturally forming a price ceiling of around 250,000 RMB/ton. High prices will compress the IRR of energy storage projects, inhibit terminal procurement willingness, and form self-restraint.
The current market presents the characteristics of "high prices, strong reality, and weak forward expectations." The short-term peak-season market has high certainty, and lithium carbonate prices have strong support. However, in the medium to long term, there are limited new lithium capacity expansion projects in 2027-2028, while terminal demand continues to rise. The lithium market is highly likely to be in a state of slight shortage or tight balance, providing support for prices. The price ceiling remains clear: energy storage customers have strong price sensitivity, and 250,000 RMB/ton will be a relatively clear price upper limit. In particular, attention should still be paid to the commercialization progress of sodium-ion batteries.