In 2024, China's lithium carbonate spot market experienced notable fluctuations driven by shifts in supply and demand. At the beginning of the year, China's lithium carbonate spot prices surged after the Chinese New Year due to production cuts in Jiangxi Province driven by the environmental protection inspections targeting primarily the lepidolite production lines. Afterwards, as demand from downstream sectors gradually increased, the supply shortage began to ease by mid-year, which made prices stable. By the third quarter, increased production using lepidolite and lithium carbonate imports caused the prices to decline. However, by the end of the year, the lithium prices rebounded due to strong demand in the electric vehicle (EV) and energy storage markets.
Price Trends:
At the beginning of 2024, China's lithium carbonate spot prices extended the weakness from 2023. During the Chinese New Year holiday, the market was quiet and spot transactions were limited. However, after the holiday, the environmental protection inspection in Jiangxi resulted in production curtailment at several local enterprises, triggering supply concerns and driving lithium carbonate prices to peak at nearly Yuan 120,000/tonne.
Toward the end of Q1 and into early Q2, the downstream demand began to pick up, and increased orders prompted lithium refineries to hold the prices firm. By the middle of the second quarter, the mounting inventory and rising spodumene imports, along with easing environmental issues in Jiangxi, gradually resumed the supply and demand balance on the market. However, by the late second quarter, weakened downstream demand caused the lithium carbonate prices to lose momentum and decline starting June.
In Q3, China's lithium carbonate prices gradually dropped to around Yuan 70,000/tonne due to increased production produced with lepidolite, rising imports, and weaker spot purchasing demand from downstream buyers.
By Q4, driven by the traditional peak season and unexpectedly strong demand in the off-season, the lithium carbonate prices rebounded significantly in November and December, reaching around Yuan 90,000 per tonne.
Source: Mysteel
Supply:
In 2024, China's lithium carbonate production rose 49.18% year-on-year (YoY) to 691,100 tonnes. Production was primarily concentrated in Jiangxi, Sichuan, and Qinghai provinces. Jiangxi led with 254,100 tonnes, accounting for 36.77% of the national total, up 30.80% YoY. Sichuan, a major hub for lithium hydroxide production, followed with 124,300 tonnes, making up 17.98% of the total and marking a 79.73% increase as some local refineries shifted their focus from hydroxide to carbonate. Qinghai produced 118,900 tonnes lithium carbonate, representing 17.21% of the total.
Additionally, Hunan and Zhejiang contributed 13,200 tonnes and 13,100 tonnes, respectively, each accounting for 1.91%. Other regions in China collectively produced 167,300 tonnes, up 135.45% YoY.
Source: Mysteel
Mysteel survey showed that production growth was primarily supported by sufficient raw material supplies. In 2024, the lithium carbonate production produced with spodumene surged, with the output more than doubling due to capacity expansion, and the market share expanded as well.
In addition, the production produced with lepidolite and from brine projects also contributed to the output growth.
Although the lepidolite production lines in Jiangxi province were temporarily disrupted earlier last year due to environmental protection inspection, it resumed steady operations by May. However, falling lithium carbonate prices in the second half significantly slowed the production, which is likely to remain low in 2025. And some production lines may shift to spodumene. Lithium carbonate production from brine projects, though influenced by seasonal factors, continued to rise due to cost advantages.
But the growth was slightly offset by a decrease in production from the recycling sector due to structural raw material shortages and narrow profit margins.
Source: Mysteel
From January to November 2024, China's lithium carbonate imports totaled 206,800 tonnes, up 49.5% YoY, according to data from the General Administration of Customs of the People's Republic of China (GACC). During the same period, the net import volume reached 203,800 tonnes, up 57.78% compared to the previous year.
Chile and Argentina were the primary sources of these imports. Chile accounted for 77.53% of the total, mainly from Salar de Atacama (Atacama Salt Flat), with suppliers including Sociedad Química y Minera de Chile S.A. (SQM) and Albemarle Corporation. SQM alone accounted for approximately 60% of the imports. Currently, China's lithium carbonate imports from Argentina primarily come from Allkem Limited's Salar de Olaroz.
China's Lithium Carbonate Imports and Origins (in Tonne)
|
Country |
2020 |
2021 |
2022 |
2023 |
2024 (Jan-Nov) |
|
Chile |
37,117 |
63,739 |
121,735 |
138,644 |
160,418 |
|
Argentina |
12,841 |
15,675 |
12,776 |
18,250 |
41,966 |
|
Japan |
401 |
145 |
130 |
260 |
1 |
|
South Korea |
961 |
1,060 |
696 |
786 |
2,347 |
|
Others |
81 |
394 |
756 |
809 |
2,109 |
|
Total |
501,021 |
81,013 |
136,093 |
158,749 |
206,841 |
Source: GACC, Mysteel
In addition, from January to November 2024, China's lithium carbonate exports totaled 3,204 tonnes, down 65.5% YoY, according to data from the General Administration of Customs of the People's Republic of China (GACC). The exports mainly went to Japan and South Korea, with Japan accounting for the largest share, exporting 1,650 tonnes, an increase of 39.9% YoY. In contrast, the exports to South Korea significantly declined to just 549 tonnes, an 89% decrease compared to the previous year.
Demand:
In terms of renewable energy policies, countries around the world are actively promoting the transition from fossil fuels to clean energy, developing energy storage systems, advancing the green transformation of industries, and establishing carbon pricing mechanisms.
For instance, China continues to build an energy system led by wind and solar power. Europe aims to double its clean energy capacity by 2030, while the U.S. extends wind and solar subsidies under the Inflation Reduction Act until 2032. Both Japan and South Korea are actively developing their hydrogen industries.
Countries are also leveraging policies to promote the adoption of electric vehicles (EVs). China offers tax exemptions, trade-in subsidies, and other incentives, while Europe and the U.S. drive EV growth through carbon emission regulations and financial subsidies.
With favorable policies in place, the market share of lithium iron phosphate (LFP) batteries in the EV sector continued to rise in 2024, and the market demand for LFP cathode materials grew steadily. According to Mysteel's survey, China's LFP production reached 2.47 million tonnes in 2024, showing significant growth of 71% compared to 2023.
Source: Mysteel
With the rapid growth of the EV industry and the energy storage market, China's total lithium carbonate consumption in 2024 reached 817,000 tonnes, up 52.8% YoY. The monthly consumption of lithium carbonate in the new energy sector in 2024 showed clear seasonal variations, with off-peak months consuming around 40,000 to 45,000 tonnes and peak months reaching 75,000 to 85,000 tonnes.
Inventory:
In the first half of 2024, China's lithium carbonate inventory remained relatively stable due to strong demand and constrained supply from environmental regulations, which kept the market balanced for most of this period.
After June, as the peak demand period for energy storage installations ended and EV sales slowed seasonally, inventories began to build across the supply chain. Downstream sectors experienced minimal accumulation, as material producers increasingly sourced lithium carbonate directly from battery manufacturers and avoided significant stocking due to financial constraints.
By the end of the year, with lithium carbonate prices remaining low, the monthly production at some factories gradually decreased, while demand remained strong. This dynamic led to a steady reduction in overall inventory levels.
Source: Mysteel
Outlook for 2025
In 2025, China's lithium carbonate market is expected to continue to grow on both supply and demand sides, and supply is anticipated to slightly outpace demand. On the supply side, lithium carbonate production produced with brines and battery scrap is anticipated to increase thanks to low cost and stabilizing lithium price respectively. Additionally, production growth from spodumene could be further supported by transitions in production lines.
The lithium carbonate produced with lepidolite is projected to show some growths as well with two companies getting new mining license for lepidolite mines, while some high-cost capacity is likely to withdraw from the market.
On the demand side, the rapid development of the EV and energy storage markets is expected to further drive the demand for LFP cathode materials, thus increasing lithium carbonate consumption. Overall, the market in 2025 may experience a slight surplus.
In terms of prices, lithium carbonate is projected to remain relatively stable, with fluctuations likely influenced by cost level of majority supply, spodumene price, as well as the suppliers' long-term agreement prices.
Written by Cora Ji, jiruyan@mysteel.com
Edited by Aggie Hu, huchenying@mysteel.com
