Lithium Reaches 18-Month High Amid Supply Constraints and Surging Demand in China

Beijing | EcoPulse24

Lithium carbonate futures in China surged to approximately 99,000 yuan per ton in December, reaching their highest point in 18 months. This increase coincides with stricter supply constraints and expectations of strong demand growth, particularly from the electric vehicle (EV) and energy storage sectors.

The price rally was supported by the Yichun Natural Resources Bureau’s announcement to revoke 27 lithium mining licenses in Jiangxi province, effective early next year. This move follows a previous suspension of activities at CATL’s Jianxiawo mine and aligns with broader government efforts to reduce overcapacity in several industries and curb the price wars that have fueled deflationary pressures.

On the demand side, new energy vehicle sales in China rose 20.6% year-on-year in November, setting a record at 1.823 million units. This trend continues to bolster lithium consumption in battery manufacturing.

Additionally, Beijing unveiled plans to double the country’s EV charging capacity to 180 gigawatts by 2027, a step that will further boost investment in lithium-rich energy storage systems, supported by new compensation mechanisms for electricity storage infrastructure.

These developments point to a new balance in the lithium market, where tighter supply meets accelerating structural demand from the energy transition, supporting prices and reshaping industry outlooks in the near term.