According to the commodity market analysis system of Shengyi Society, there have been frequent bullish events in the market recently, forming comprehensive support from the supply side to the demand side, driving the continuous rise of lithium carbonate prices. As of January 27th, the benchmark price of Shengyi Society’s battery grade lithium carbonate was 16900 yuan/ton, up 9% from the same period last week (January 20th), up 43.5% month on month, and up 112% year-on-year.
The expectation of supply contraction is heating up, and the disturbance in Jiangxi’s production area has become the core cause
The core variables on the supply side come from policy constraints and production disturbances in Jiangxi’s production areas. With the release and implementation of the new Mineral Resources Law and the Action Plan for Comprehensive Management of Solid Waste, the regulatory requirements and environmental supervision of lithium mining production have become significantly stricter, and tailings treatment has become a key regulatory content in the lithium mining production process. Market news shows that some mines in Jiangxi have been considering production stoppage, causing widespread concerns in the industry about supply contraction. However, there is currently no official document or announcement from companies confirming the production stoppage plan.
Demand side policy dividends are released, providing strong support for off-season demand
Last week, lithium carbonate prices fell due to expectations of a decline in demand for new energy vehicles in the first quarter. However, the notice issued by the National Development and Reform Commission and the Ministry of Finance on the implementation of large-scale equipment updates and the policy of exchanging old for new consumer goods in 2026 has improved market expectations for a decline in demand for new energy vehicles in the first quarter of 2026.
The energy storage sector has also shown impressive performance, with the current energy storage order situation being good. Coupled with the adjustment of the value-added tax export rebate policy for battery products, the “export rush” effect is significant.
High price fluctuations and intensified market divergence
As the price of lithium carbonate continues to rise, market divergence is gradually increasing. From the downstream market perspective, companies have limited acceptance of the current high prices and their purchasing enthusiasm has significantly decreased. At the same time, there are concerns in the market about the increase in supply. During the continuous decline in lithium carbonate prices in 2025, some high cost production capacity was forced to shut down due to price inversion. However, due to the short duration of sustained low prices, this part of production capacity has not been fully cleared. After the current rapid price increase, the stimulating effect on supply increment is strong, which may drive the restart of idle production capacity and alleviate the tight supply situation.
The data analyst of Business Society’s lithium carbonate believes that the downstream is actively stocking up, which can provide support for prices in the short term. However, if there is no sustained purchasing demand to keep up after the centralized procurement is completed, the market is likely to readjust and find a new price center. Specific attention still needs to be paid to changes in market supply and demand.