China's domestic lithium carbonate futures and spot prices traded rangebound last week, after falling for two consecutive weeks in a row. As of the close on June 2, the most-traded GFEX contract LC2609 settled at RMB 172,980/tonne.
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Based on Mysteel's survey of 43 sampled traders, total weekly lithium carbonate transaction volume stood at 8,867 tonnes in the week ending May 29, of which 8,532 tonnes (over 96%) were sold to downstream buyers. However, traders' inventories rose 2,418 tonnes week-on-week to 38,385 tonnes. Rising inventory levels, together with record-high warehouse receipts, confirm that lithium carbonate supply has remained relatively ample.
On the feedstock front, shipments of lithium ore from Zimbabwe have proceeded slowly, raising the risk that cargoes will not reach China as expected in early July, which could in turn affect China's lithium carbonate production around mid-July.
Meanwhile, the restart of Jianxiawo mine remains uncertain. Market attention is focused on whether a second environmental impact assessment (EIA) announcement will be issued by mid-June. A delay in EIA approval would significantly lower the probability of a July restart, requiring a revision of the supply-demand balance sheet.
Australia's spodumene shipments in May also fell short of market expectations, according to Mysteel's tracking of shipping fixture, which indicates that arrivals in June are expected to be relatively low, potentially constraining feedstock availability for some converters.
In terms of demand, China's lithium iron phosphate (LFP) production reached 498,300 tonnes in May 2026, up 4.2% month-on-month. Order books remained strong, and leading producers increased tolling orders, keeping overall operating rates high.
However, the pace of new capacity additions was slower than expected in some cases due to feedstock constraints or commissioning delays. LFP production is expected to rise further to 519,300 tonnes in June, a month-on-month increase of around 4.21%. New and expanded capacity in Shandong, Sichuan, and elsewhere is expected to continue ramping up, though its actual commissioning schedule and its knock-on effect on raw material demand will require close monitoring.
In the near term, sufficient lithium carbonate supply and essential downstream procurement have been in a standoff, with record-high warehouse receipts and elevated traders' inventories weighing on prices.
Meanwhile, increasing feedstock-side disruptions could, over the medium term, affect converters' operating rates and cost support for lithium carbonate based on outsourced feedstock.
Taken together, lithium carbonate prices are expected to remain rangebound. Market attention should stay focused on the progress of the Jianxiawo mine's EIA and the actual shipment and arrival timeline of Zimbabwe's lithium ore.
Written by Aggie Hu, huchenying@mysteel.com
