Due to the impact of tariffs and expectations of reduced supply, lithium carbonate prices began to decline in April, approaching the key cost-support level of around Yuan 70,000/t, according to Mysteel research.
In March 2025, China's lithium carbonate production reached 80,200 tonnes, up 25.2% month-on-month. The substantial increase in actual production was primarily driven by smooth ramp-ups at lithium salt plants, nearly full-capacity operations at producers with their own spodumene mines, robust orders in the recycling sector, and the resumption of production at certain smelters following technical upgrades.
For April 2025, China's lithium carbonate production is projected to decrease to 76,600 tonnes, a 4.6% drop from March. This decline is mainly attributed to significantly lower operating rates at contract refineries in northern China. Additionally, continued cost inversion in lithium concentrate prices has made operations challenging for producers without in-house mines, especially in the absence of contract orders. Some spodumene production lines have also entered maintenance.
From the raw material side, the lithium carbonate production from spodumene in March reached a record high, surpassing levels seen during the peak season in December last year. This was largely driven by high operational rates and stable raw material supply at medium and large-scale refineries, although a few contract refineries reported slight production reductions. However, contract orders for spodumene are likely to decline in April.
In addition, the lithium carbonate production from lepidolite is projected to increase marginally month-on-month, while production from recycled materials remained stable. And most recycling plants maintained operations without shutdowns or maintenance.
Source: Mysteel
According to data released by Chilean customs, Chile exported 16,600 tonnes of lithium carbonate to China in March 2025, up 37.8% month-on-month. Imports of lithium carbonate into China are expected to reach around 22,000 tonnes in April.
Based on Mysteel's survey, lithium iron phosphate (LFP) production in March 2025 reached 270,100 tonnes, up 15.48% month-on-month. This growth was primarily driven by seasonal demand, with leading and second-tier LFP manufacturers maintaining high operating rates.
Source: Mysteel
For April 2025, LFP production is expected to be around 272,800 tonnes, with only a limited month-on-month increase. Some producers are expected to reduce production due to production line maintenance or product adjustments.
According to Mysteel's survey, both supply and demand increased in March, but the supply side grew at a faster pace, resulting in a clear market surplus. The lithium carbonate market in China is expected to continue building inventory in April, with a projected increase of 5,379 tonnes. Although there are expectations of reduced supply, steady downstream demand means the market will likely remain in a state of oversupply and inventory accumulation.
Source: Mysteel
Mysteel's tracking on lithium carbonate marketable inventory shows a slight decline last week after several consecutive weeks of increases. Despite the ongoing surplus, upstream suppliers showed less reluctance to sell, downstream demand remained weak, and stronger market basis pricing allowed traders to restock at current price levels, leading to partial inventory transfer to downstream sectors.
According to the daily spot transactions, when lithium carbonate futures prices rise above Yuan 70,000/t, purchasing enthusiasm significantly declines, and overall market activity remains subdued. Most producers hold a pessimistic outlook on the current price trend and tend to adopt a cautious strategy.
In summary, China's lithium carbonate market is expected to see an inventory buildup of over 5,000 tonnes in April. Market participants are advised to closely monitor whether more lithium salt producers will cut or suspend production under current price levels, and whether tariff-related news will directly impact procurement behavior at the materials end.
Written by Cora Ji, jiruyan@mysteel.com
