Since April, lithium carbonate prices plunged below Yuan 70,000/t and continued to fall amid a prolonged decline in lithium ore prices and weak demand, fueling pessimism across the market. However, recent signs of stabilization, coupled with easing concerns over international tariffs, suggest a potential rebound may be on the horizon.
According to Mysteel, China's lithium carbonate production in April totaled 68,300 tonnes, down 14.2% month-on-month. The sharp decline was primarily due to temporary production halts or maintenance at several smelters facing cost pressures. While production remained relatively stable in Qinghai and Jiangxi, operating rates in northern China and Sichuan dropped significantly. Without their own mines and lacking tolling orders, many producers struggled to operate amid continued losses. On the recycling side, further losses driven by high raw material costs also contributed to the overall production decline.
Source: Mysteel
For May 2025, the lithium carbonate production in China is expected to rise to 70,600 tonnes, up 2.5% month-on-month. As smelters undergoing maintenance plan to resume operations, some producers without mines in East China have brought raw materials. Seasonal improvements in Qinghai are projected to support a slight production increase, and with a relatively stable supply from the recycling sector, total production is expected to recover modestly.
From the raw material side, the lithium carbonate production from spodumene declined slightly in April due to ongoing losses, though overall fluctuation was limited as most producers maintained stable operations without plans for further maintenance. Some producers have secured more cost-effective ore resources, which could support modest production increases in May.
The lithium carbonate production from lepidolite remained constrained by high costs, and only producers with their own mines were able to operate normally. The production from recycled materials held steady in April, as most producers opted to maintain operations without shutdowns. The production from brine lakes remained stable due to its lower cost.
Source: Mysteel
According to Chilean customs, lithium carbonate exports from Chile totaled 21,770 tonnes in April, up 7.63% month-on-month. Exports to China reached 15,545 tonnes, down 6.33% month-on-month. While earlier pricing disputes between South American suppliers and downstream buyers had disrupted shipments, recent negotiations have progressed smoothly, suggesting future export volumes will likely remain stable.
Based on Mysteel's survey, China's lithium iron phosphate (LFP) production reached 268,700 tonnes in April, remaining largely flat month-on-month. Most producers maintained stable operations, with only a few leading manufacturers experiencing production line maintenance or order adjustments.
Source: Mysteel
China's LFP production in May 2025 is projected at 274,500 tonnes. Power battery orders have shown improvement, and some producers have seen an uptick in energy storage orders. With recent easing in trade tariffs, the current 40.9%-64.9% tariff gives Chinese energy storage products a cost advantage over U.S.-made counterparts, potentially spurring a recovery in export demand.
Source: Mysteel
Mysteel's tracking of lithium carbonate marketable inventory shows that there was a slight increase in inventory held by traders, driven by long-term contract arrivals and futures purchases. Inventories at lithium salt producers remained stable month-on-month, with smelters generally reluctant to sell, especially when market prices fall below long-term contract price averages. Overall, marketable inventories remain elevated, and the destocking pace is slower than expected, keeping spot prices under pressure in the short term.
According to the daily spot transactions, some traders slightly increased sales to downstream buyers as prices dipped, but overall deal activity remained weak, with buyers maintaining a cautious stance.
In summary, the lithium carbonate market is expected to see a stock build of around 1,000 tonnes in May. While supply is rebounding due to smelter restarts, demand is only showing a marginal month-on-month increase. If U.S. tariff policies continue to ease, the production of lithium carbonate could rise further. Overall, the market is approaching a tight supply-demand balance, and prices may see some short-term support.
Written by Cora Ji, jiruyan@mysteel.com
