China's domestic lithium carbonate prices pulled back to around Yuan 90,000/tonne since October 2026, a new low for 2026, on the backdrop of the advancement of the Jianxiawo restart, a surge in overseas lithium ore arrivals, and failing "Golden September, Silver October" demand peak, which eroded the bullish sentiment on lithium carbonate. Early November 2026 saw wide-range swings on recovering macro sentiment, but concerns over rising forward supply and weakening demand still dominate, with market divergence intensifying.
On the fundamentals, Mysteel's survey suggested that China's lithium carbonate production for October 2026 was 117,700 tonnes, up 2.7% MoM. Actual October production was revised up from early-month schedules, mainly due to higher-than-expected production at some spodumene lines. Although the lepidolite segment saw some contraction on feedstock supply, it did not lead to production curtailment of lithium salt. In addition, the capacity utilization rates at recycling and salt lake producers remained stable.
Looking ahead over November 2026, the lithium carbonate production is estimated at 121,800 tonnes, up 3.5% MoM. In November, some producers in Qinghai cut schedules substantially due to equipment maintenance or weather. On the other hand, some spodumene producers in northern China raised the production on ample toll-processing orders; and the recycling segment saw a slight MoM production increase due to a larger survey sample, with falling prices not yet significantly suppressing recycling output.
Elsewhere, Chilean customs export data show Chile exported 19,800 tonnes LCE of lithium salts to China in October 2026, up 7.3% MoM and 15.8% YoY, of which lithium carbonate exports to China were 14,300 tonnes, up 6.5% MoM but down 11.6% YoY. October saw a slight MoM increase, with absolute volumes still at yearly lows: July-October ranged between 13,500 and 15,100 tonnes, about 30% below the peak. China's November net lithium carbonate imports are expected at 30,000-32,000 tonnes.
Chilean customs data also show Chile exported 10,800 tonnes of lithium sulfate to China in October 2026, up 9.5% MoM and 535.0% YoY. Cumulative exports to China from January to October reached 142,500 physical tonnes, up 97.6% YoY, faster than the 21.8% growth in lithium carbonate exports to China over the same period. Lithium sulfate shipped to China and converted into lithium salts at toll-processing plants has been an important supply-side supplement in 2026.
On the demand end, China's LFP cathode production was 607,800 tonnes in October 2026, up 0.76% MoM. Most producers maintained stable operations, though some fell short of expectation due to feedstock supply or production line issues.
In November 2026, the LFP production is estimated at 600,800 tonnes, down 1.15% MoM. Some producers are trimming volumes modestly on order structure adjustments, while others continue to ramp up new capacity, leaving overall industry schedules slightly lower. Orders are relatively firm in the first half of November; attention should be paid to whether order adjustments emerge in the second half.
On inventories, cathode plants have stuck to need-based procurement amid sharp price swings, keeping raw material inventories low and relying mainly on long-term contract volumes. And no proactive restocking has been observed near Yuan 90,000/tonne. Early-month spot purchases fell while long-term pickups rose, keeping in-plant inventories drawing down. After the price drop, buying turned cautious and wait-and-see sentiment picked up, with no surge in spot deals and little appetite to chase rallies.
Source: Mysteel
Based on Mysteel's surveys across supply and demand, the lithium carbonate market is expected to see continued destocking in November, with the decline narrowing to 15,600 tonnes.
Another factor worth monitoring is the warrant. After concentrated cancellation at end-October 2026, warrants fell to a yearly low. Since November, a weakening basis and still-wide near-far month spreads have reopened delivery space, with warrants rising continuously. Destocking on the books is slowing, while warrant registrations are picking up, suggesting some cargo is moving from hidden inventories into visible exchange warrants. In plain terms, the spot market is weak right now.
Looking ahead, while the lithium carbonate destocking process has not been interrupted, if orders continue to be revised down, destocking could narrow further, raising price sensitivity to bearish factors. Near-term price direction will still depend on spot strength and actual Q1 downstream orders rather than the current balance sheet itself.
In the medium term, both supply and demand are expected to be in expansion channels in 2027. Under neutral assumptions, the global lithium resource balance is expected to remain near tight balance for the full year, with no major surplus expected. Earlier pessimistic demand expectations have been partly priced in, and low inventories at both the converters and mines will still provide some supply risk premiums for prices. And the downside room for prices is expected to be limited before the end-user demand decline is substantially transmitted into large-scale lithium salt and lithium ore inventory buildup.
Risk disclaimer: disrupted African ore shipments, plus year-end rush exports exceeding expectations and front-loading demand
Written by Aggie Hu, huchenying@mysteel.com
