In 2025, lithium carbonate prices continued the downward trajectory, falling from Yuan 75,300/t at the beginning of the year to the current level of Yuan 67,900/t -- below the production cost for some lithium salt producers and approaching the breakeven point for even the most cost-efficient players in the industry.
At the same time, the price inversion between lithium ore and lithium carbonate has persisted for nearly half a year, placing increasing pressure on the cash flow of lithium salt enterprises. In an oversupplied market, lithium carbonate smelters face not only the challenge of cost inversion, but also multiple operational hurdles such as tailings disposal difficulties, cost reduction and efficiency improvement pressures, insufficient tolling orders, and intensifying competition over processing fees.
According to Mysteel survey of 48 lithium carbonate smelters across various raw materials and provinces in China (covering approximately 60% of total industry capacity), the production and planned production are summarized below:
Source: Mysteel
Source: Mysteel
The lithium carbonate industry remains in a state of oversupply. As of now, no significant production cuts or shutdowns have materialized at major mines, either in China or abroad, suggesting that lithium carbonate prices may continue to decline, potentially breaching the cost bottom lines of more lithium salt producers.
Furthermore, following two years of capacity expansion on the supply side, the current Yuan 70,000/t pricing is expected to slow the pace of new supply growth moving forward.
Written by Cora Ji, jiruyan@mysteel.com
