Highlights
- Lithium carbonate prices fluctuated between 72,000-110,000 yuan/mt
- Domestic production surged 47% to 680,000 metric tons
- Demand grew 44% driven by electric vehicle and energy storage systems
- A significant market surplus developed by year-end
- The 2025 outlook suggests continued market oversupply
- Potential industry consolidation
- Downward price pressures are expected
The lithium carbonate market in 2024 was marked by sharp price volatility and significant changes in supply and demand dynamics. Prices oscillated between 72,000 yuan/mt and 110,000 yuan/mt, averaging 90,000 yuan/mt for the year. Despite this turbulence, domestic production surged 47% year-on-year to 680,000 metric tons (mt), with imports also increasing 46% to 230,000 mt. Annual demand grew 44%, reaching 850,000 mt, largely driven by the electric vehicle (EV) and energy storage systems (ESS) sectors. However, the surplus widened, with inventory climbing to approximately 110,000 mt by year-end.
Price Trends and Market Phases
Lithium carbonate prices fluctuated throughout the year, influenced by supply bottlenecks, EV sector dynamics, and seasonal restocking patterns:
| Time | Summary |
|---|---|
| Early 2024 | Prices spiked due to supply constraints from environmental checks and production cuts in major regions. |
| Mid-Year | A slowdown in EV demand led to high inventories and falling prices. |
| Late-2024 | Year-end demand, driven by policy incentives and overseas installations, temporarily reversed the price decline. |
Supply Expansion and Challenges
Domestic production rose sharply, led by spodumene-based output, which grew 116% year-on-year due to new capacity. Salt lake production also increased by 37%, while lepidolite and recycled lithium carbonate faced cost and resource challenges. Imports from Chile and Argentina dominated, accounting for 98% of China’s total imports. However, China’s lithium carbonate exports remained minimal, with less than 5,000 mt shipped overseas due to competitive pricing from international suppliers.
Demand Drivers and Risks
The growth of lithium iron phosphate (LFP) batteries, which account for 67% of consumption, propelled demand for lithium carbonate. While domestic and international policy support fueled year-end demand spikes, the rush for installations in Q4 likely borrowed from future demand, raising concerns about sustainability in 2025.
Outlook for 2025
The lithium carbonate market is expected to remain oversupplied as production outpaces demand. Domestic output is projected to grow by over 25%, while increased imports of low-cost lithium carbonate will pressure domestic producers. Demand from the NEV and ESS markets is forecasted to grow by over 20%, supported by favorable policies and replacement cycles. However, with prices nearing cost thresholds, the potential for further declines may challenge high-cost producers, driving industry consolidation and possibly forcing some out of the market.
Implications and Challenges
The 2024 trends highlight critical questions for the lithium carbonate industry:
- Will the influx of low-cost imports force domestic producers to innovate or exit?
- Can demand growth from NEVs and ESS sustain the industry’s rapid expansion?
- How will policy shifts and geopolitical dynamics impact global trade and supply chains?
The lithium carbonate market’s future hinges on balancing supply growth, maintaining competitiveness, and adapting to evolving global demand. As prices face downward pressure, the industry’s resilience will be tested in 2025 and beyond. The underlying data was accessed from the Shanghai Metals Market.
Daniel
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