Lithium prices hit three year-high amid soaring demand, tightening supplies
On May 11, lithium carbonate futures on the Guangzhou Futures Exchange closed at their highest level in almost three years.
- Prices hit RMB 205,020/MT, more than triple the RMB 58,000/MT low reached in June 2025.
Some context: China’s battery industry – especially battery energy storage (BES) – is rapidly expanding amid booming global demand.
- The Iran-driven global energy crisis is further turbocharging demand as governments and consumers turn to Chinese EVs and cleantech to shield themselves against soaring fossil fuel prices.
The outlook for lithium supply, meanwhile, remains highly uncertain:
- It’s unclear whether current lithium prices are high enough to unleash a new wave of supply-side expansion, or how quickly new capacity or idled production can ramp up to meet increased demand.
- Markets are also worried that China’s revised Mineral Resources Law – which requires local authorities to reassess mining qualifications for low-grade lithium deposits – could delay the restart of major Jiangxi-based lepidolite projects, just when supply is most urgently needed.
Get smart: While speculation is undoubtedly contributing to the recent price spike, the underlying supply-demand imbalances driving it are well grounded and unlikely to be resolved in the near-term.
Get smarter: While still far from the extreme highs reached in 2021–2022 when lithium carbonate peaked at almost RMB 570,000/MT, prices are approaching uncomfortable levels whose effects will soon ripple across EV, battery, and BES supply chains.
- Further increases will intensify margin pressure on downstream industries and ignite a new round of battery technology development and diversification efforts.