Since mid-August, with no further supply-side disruptions following the suspension of production at the Jianxiawo mine, bullish sentiment for lithium carbonate has quickly faded. Prices have significantly retreated, fluctuating around Yuan 75,000 per tonne amid increased divergence in market views.
However, according to reports after the GFEX's day session closed on Sep 9 that, Yichun Shidai, a subsidiary of CATL, held a "Working Meeting on the Resumption of Production at the Jianxiawo Lithium Mine" at 9:20 a.m. on the same day to specifically advance the restart of operations at the mine. Sources familiar with the matter revealed that the approval process for CATL's mining rights and license for the Jianxiawo Lithium Mine is progressing smoothly, and production is expected to resume soon - "even faster than the most optimistic market expectations."
Still, disruptions related to mining rights in Jiangxi appear unresolved, and the market still holds expectations, though weakening, for further supply-side contractions.
Looking ahead over September, domestic lithium carbonate production is projected at 85,400 tonnes, up 3.3% month-on-month (MoM), and the said production resumption at Jianxiawo is unlikely to impact the supply in September, Mysteel believes.
Source: Mysteel
From the perspective of raw materials, the spodumene-based lithium carbonate production is expected to continue increasing in September, marking the fifth consecutive month of MoM growth. Some production lines in Sichuan Province are operating at full capacity due to gradual arrivals of ore from Africa, contributing significant monthly increments. Additionally, some tollers in North China have also reported an increase in orders, therefore raising the production accordingly.
Among the lepidolite-based projects, three CATL-affiliated producers slightly reduced the production in August following the suspension at Jianxiawo, which is expected to decline significantly in September as lepidolite stocks depletes. Other lepidolite production lines experience minor fluctuations.
The lithium carbonate production based on recycled materials has steadily declined since the beginning of the year but recently saw higher operating rates due to recent price hike in futures and monthly average.
The lithium carbonate production from bines has remained largely unaffected by mining disruptions, with most operations running normally at full capacity.
For imports, Chile customs' data showed that the country's lithium carbonate exports totaled 16,903 tonnes in August 2025, down 19.2% MoM but up 4.9% year-on-year (YoY). Lithium sulfate exports to China were 6,916 tonnes, down 33.4% MoM and 1.5% YoY.
The lithium carbonate shipments from Chile have remained low in recent months, primarily due to sufficient domestic supply, reducing demand for overseas lithium carbonate. If price negotiations between domestic and overseas producers change, minor increments may occur.
On the demand end, the LFP cathode production in September is projected to increase to 333,500 tonnes. During the traditional high season, industry demand remains robust, especially the energy storage sector. In this case, the leading cathode factories operate at full capacity, and the second and third-tier enterprises also report notable order growth. Overall, the LFP production in September is expected to mark a monthly growth of 4.63%.
In summary, both supply and demand will rise in September, with the fundamentals maintaining a tight balance.
Surveys indicate a minor supply gap of 305 tonnes in September. Demand, driven by energy storage, continues to exceed expectations, fulfilling the traditional high season expectations. Despite significant reductions in Jiangxi lepidolite-based lithium carbonate production, high lithium futures prices spurred substantial spodumene-based production, pushing domestic lithium carbonate output to a record monthly high and preventing a large inventory drawdown.
On the warrants front, the warrants inventory has significantly increased since late August. The producers which contributed considerable warrants have resumed large-scale production. And the favorable spot-futures spread has provided moderate profit-making opportunities. The warrants inventory is likely to accumulate further should the spot-futures spread remains profitable.
On the spot market, the marketable lithium carbonate inventories held by traders and carbonate producers among 41 sampled entities totaled 34,620 tonnes as of September 5, down 2,560 tonnes from the previous week, marking the third consecutive weekly decline since mid-August and returning to mid-July levels.
However, the decline has slowed due to weaker downstream procurement. Both traders and lithium salt producers have seen minor inventory declines. Lithium salt producers have shown intentions to raise prices and release inventory, while downstream cathode plants have slowed procurement after sufficient late-August purchases. The traders, on the other hand, are cautious due to uncertain trends of spot-futures spread and may gradually rebuild stocks.
Regarding the spot transactions, late August saw significantly improved spot transactions due to reduced tolling orders from major producers, and strong bullish sentiment among cathode manufacturers. However, as prices return to the downtrend and the mining-end disruptions' impact on supply fades, spot transactions have weakened entering in September, with downstream cathode factories primarily relying on feedstock via long-term agreements.
To sum up, Jiangxi mining disruptions may recur, but without substantial production suspensions, few factors will stimulate price increases. And the monthly production data indicates that the impact of Jianxiawo's production suspension has been fully offset by spodumene-based production increases. Prices are expected to trend weakly in the short term.
In the medium term, the end-market consumption remains strong in the off-season, and support in the traditional peak season persists. The spot demand remains robust, with pre-holiday stocking expected by end of September. Further monitoring of marketable inventory drawdown is needed.
Ongoing tracking of lithium mine developments is essential to monitor potential further production cuts or suspensions and signs of weakening demand in the fourth quarter.
Written by Aggie Hu, huchenying@mysteel.com
