Recent market discussions have been dominated by frequent rumors regarding the potential resumption of operations at CATL's Jianxiawo mine. This has prompted the market to reassess anticipated supply increments while also noting the significant disruptive influence of futures prices on the spot market.
From a monthly supply-demand perspective, December will likely see a sustained destocking trend for lithium carbonate. On the demand side, energy storage battery production scheduling has remained robust, sustaining peak season operations. However, influenced by seasonal weakness in power batteries, downstream cathode active materials demand and production scheduling has reported a slight month-over-month decrease compared to November. While the supply side is likely to retain a minor increase, the monthly destocking is anticipated though potentially at a lower pace.
Source: Mysteel
The buzz around the potential restart of the Jianxiawo mine has led the market to re-evaluate expected supply additions. There is a growing consensus that lithium carbonate supply will continue to climb in the coming months at current price levels. Consequently, caught between strong fundamentals and weaker future expectations, lithium carbonate prices in December are projected to trend sideways. The short-term direction is likely strongly correlated with the definitive timeline for Jianxiawo's resumption. The estimated trading range for lithium carbonate in December is Yuan 88,000 - 100,000/tonne. Moving forward, close attention should be paid to the progress of Jianxiawo's restart and whether demand in January will weaken significantly.
In Q4, the suspension of CATL's Jianxiawo mine due to an expired mining permit (with operations yet to resume), coupled with strong demand from both energy storage and power battery sectors, led to a significant monthly supply shortfall of lithium carbonate. This resulted in rapid inventory drawdowns, clearly reflected in warehouse receipt data.
Looking towards year-end, December is expected to see a slight decrease in downstream demand with minimal impact, alongside a modest sequential increase in supply. This suggests a slowdown in the pace of phased destocking. If Jianxiawo does not resume operations in December, lithium carbonate prices are likely to remain above Yuan 95,000/tonne. A resumption, however, would fuel expectations of future inventory accumulation, potentially driving prices below Yuan 90,000/tonne.
Recent reports from some battery manufacturers suggest that "B-series" battery makers might cut orders to cathode material supplies by month-end, which could lead to a downward revision of December production schedules. Additionally, on the lithium carbonate supply front, Zijin's project ramp-up appears slower than expected, potentially contributing to a reduction in lithium carbonate output for December.
Looking ahead to Q1 2026, the supply side is expected to see monthly volumes nearing 100,000 tonnes (excluding holiday periods around the Chinese New Year). This is due to high recent prices encouraging ample hedging by lithium salt producers, stable lithium ore shipment, and the gradual ramp-up of new production lines. On the demand side, power battery production in January is forecast to decline due to subsidy phase-outs. Whether the incremental demand from the energy storage sector can offset this power battery gap remains a point of debate. This uncertainty is a key factor contributing to the current market price volatility above Yuan 90,000/tonne, as it remains unclear whether a significant supply deficit will persist into Q1.
This is a key takeaway from Mysteel Battery Materials Procurement Strategy Report Monthly. Please contact inquiries@mysteel.com for trial reading the full report, or visit (https://www.mysteel.net/news/5107253-mysteel-battery-materials-procurement-strategy-report-monthly) for more information.
