The lithium market has recently witnessed volatile price movements, with lithium carbonate prices surging 70% from their yearly lows. According to Goldman Sachs' latest field research report, the lithium market is expected to enter a "tight balance" between supply and demand next year, with prices likely to remain range-bound.
On the 20th, the main lithium carbonate futures contract continued its upward trend, hitting a yearly high of 102,500 yuan/ton during intraday trading, marking a 4% gain. In the spot market, the average price of battery-grade lithium carbonate rose to 99,250 yuan/ton, up 1,700 yuan/ton from the previous trading day and 65% above the yearly low of 59,900 yuan/ton.
Tightening supply has been a key driver of the price rally. Data from the Guangzhou Futures Exchange shows that China's lithium carbonate inventories have declined for 13 consecutive weeks, with total destocking reaching 22,000 tons. Inventory turnover days dropped to 28.1 days, the lowest since the futures listing.
Goldman Sachs noted in its November 19 report that field research indicates China's lithium chemical inventories are depleting at a weekly rate of approximately 4,000 tons. The delayed resumption of production at CATL's Yichun Jianxiawo lithium mine—which previously produced 7,000-8,000 tons of lithium carbonate monthly, accounting for about 10% of domestic demand—has further heightened short-term supply concerns.
On the international front, Goldman Sachs observed that direct-shipping ore from South Africa and Nigeria is arriving in China at low costs (around $500/ton for 6% Li₂O spodumene). While most African projects remain profitable at current prices, shipments from countries like Mali are deemed uneconomical.
The bank noted that Chinese converters find production expansion reasonable at current price levels but face capacity utilization ceilings due to limited seaborne spodumene supply. Feedback suggests lithium carbonate prices may fluctuate between 80,000-100,000 yuan/ton ($10,000-12,500/ton, VAT excluded).
Goldman Sachs anticipates that despite positive demand prospects and declining inventories, elastic supply—particularly from Africa—could increase if prices rise further. Overall, prices are expected to remain range-bound until mid-2026, when the market may tighten due to constrained domestic Chinese supply and robust demand. The bank forecasts an average 2026 lithium carbonate price of $8,900/ton.
**Cautious Market Sentiment** Despite the strong rally, domestic analysts urge caution regarding future trends.
CITIC Futures analyst Zhang Weixin attributed the price surge to sustained inventory drawdowns and energy storage demand but emphasized monitoring production resumption at Jiangxi lithium mines.
Fang Zheng Mid-term Futures' new energy lead researcher Wei Chaoming noted weakening energy storage cell shipments, with October production (54.3GWh) exceeding demand (52.98GWh) for the second consecutive month. Seasonal demand softening in Q4 may heighten risks for buyers chasing the rally.
Industrial Futures analyst Liu Qiyue observed record-high open interest in lithium carbonate futures, suggesting short-term upside momentum. However, with prices at elevated levels, further validation of supply-demand improvements is needed.