With lithium carbonate prices re-gaining momentum last week, the market narrative has shifted from "demand-driven" to "supply-side disruption". Mysteel's data indicated that the total lithium ore inventories held by traders have dropped to 193,000 tonnes as of March 27, with only 95,000 tonnes marked as marketable, a sharp decline from the previous session.
Against this backdrop, market concern over lithium ore supply has intensified, which is aggravated by the prolonged disruption in Zimbabwe and the impact of fuel shortages in Australia. Although lithium carbonate transactions are showing some signs of fatigue amidst the lithium price rally, prices are expected to remain firm until the ore-side bottlenecks are resolved.
In the short term, the lithium carbonate prices are likely to trade in the range of Yuan 155,000-185,000/tonne, with further upside potential toward the end of April.
The export ban in Zimbabwe has now persisted for more than a month, with no clear signal of its lifting. As the world's second-largest source of hard-rock lithium ore, Zimbabwe's share of China's lithium ore imports rose steadily from 2022 to 2025, peaking at 20.6% in 2024 and 15.5% in 2025, equivalent to lithium carbonate supply of 127,000 tonnes and 134,000 tonnes, respectively, or 9.2% and 7.9% of global lithium carbonate supply in those years.
For 2026, Zimbabwe is expected to contribute 180,000 tonnes LCE, accounting for 8.4% of global supply. Given the average two-month shipping time for concentrates to China, a tangible impact on domestic lithium carbonate production is expected from late April to May.
The lithium ore inventories are flashing a warning as well. The marketable lithium ore inventory held by traders dropped to 95,000 tonnes as of March 27, a decline of 176,000 tonnes from the pre-Chinese New Year peak. Total traders' inventories stood at 193,000 tonnes, down 116,000 tonnes from that high.
Source: Mysteel
Also based on Mysteel's tracking, on March 27, the sampled traders reported selling 71,600 tonnes of ore, with 43,000 tonnes going to lithium refineries. On the same day, 12,000 tonnes saw the closing of their corresponding back-pricing orders with an average of Yuan 165,000/tonne.
Rising lithium ore prices are spurring spot buying, but the sellers have refrained from selling, with the traded processing margins compressed to historically low levels. Current processing margins for Australian spodumene reported around Yuan 18,000/tonne, down from Yuan 20,000/tonne before the Chinese New Year.
Downstream, while lithium refineries remain eager to operate at high capacity utilization rates, raw material availability has been tightening. Lithium ore inventories at lithium refineries have fallen below 30 days of consumption, leaving future output increasingly dependent on the pace of inbound shipments.
Amidst the lithium price rally last week, the lithium carbonate transaction volumes cooled to 8,394 tonnes in the week ending March 27, down 6,616 tonnes from the prior week, reflecting weak downstream appetite when lithium prices are high.
Meanwhile, as futures prices climbed, lithium refineries became more willing to sell. As of March 27, the marketable lithium carbonate inventories held by sampled traders and refineries stood at 34,980 tonnes, up 1,220 tonnes week-on-week.
On the demand end, the April production for LFP cathode materials is expected to rise 2-4% month-on-month, while cell production is projected to jump 3-4% in April. May cell output is expected to reach new highs, reinforcing the view that peak season demand in the second quarter remains intact.
In summary, the supply disruption in Zimbabwe remains core variable at this stage, while the impact of fuel shortages in Australia appears limited in the near term. Demand fundamentals remain solid, though lithium carbonate offtake has shown signs of weakening at higher price levels.
In the near term, the lithium carbonate prices are expected to consolidate in a high range between Yuan 155,000–185,000/tonne. Moreover, prices could see further upside by the end of April as supply-side tensions continue to build, particularly with the Zimbabwe issue unlikely to be resolved soon, and its effects on domestic lithium carbonate production expected to materialize in late April to early May.
Written by Aggie Hu, huchenying@mysteel.com
