Lithium Carbonate Prices Rebound as Citi Forecasts 75,000-Ton Global Deficit by 2026
Claire Weston
Lithium carbonate is rebounding from a low of ¥120,000/tonne; Citi forecasts a 75,000-tonne global shortfall in 2026. Supply cuts and surging energy-storage demand will determine whether the price breaks ¥200,000 — and reshapes battery-chain costs.
Why does lithium carbonate matter so much right now?
Lithium carbonate accounts for 55%–65% of cathode material costs, and cathode materials make up roughly 30% of cell costs. This means → every leg up in the lithium price feeds directly into the manufacturing cost of both LFP (lithium iron phosphate — the dominant battery chemistry today) and ternary batteries.
The current price sits around ¥120,000/tonne. Markets expect it to break ¥200,000/tonne by the second half of 2026. In plain terms = the price could nearly double within six months, which is why the entire battery chain is watching.
Citi forecasts a 75,000-tonne global shortfall in 2026, roughly 4% of total demand. That gap looks small, but lithium is a must-have input — a marginal deficit is enough to drive prices sharply higher.
What is going wrong on the supply side?
Four lithium mines in Jiangxi province have delayed restarts over environmental-permit issues; the earliest they can resume is mid-July to early August. This means → China's largest lithium-mining region will be offline through the peak-demand season.
Zimbabwe imposed a 5% export tax on lithium ore at the start of the year, pushing up African supply costs directly.
Australian high-cost mines are adding little output. In plain terms = the three main global lithium sources — China, Africa, and Australia — are all tightening at the same time, compressing supply elasticity to near zero.
Who is pulling demand higher?
In the first four months of 2026, China's energy-storage battery output rose nearly 100% year on year; new-energy commercial-vehicle installations also doubled. This means → power batteries and storage systems are now a twin engine, and lithium demand growth far exceeds the old model that tracked only passenger EVs.
Citi notes that supply contraction, surging storage demand, and steady EV-battery demand are combining to pull lithium carbonate out of its price trough.
However, China's LFP battery capacity is massive and domestic competition fierce — lithium-price increases may not pass through fully to downstream cell makers. This reflects an unresolved tug-of-war between upstream pricing power and downstream absorption capacity.
Could sodium-ion batteries benefit from higher lithium prices?
Sustained lithium-price rises are accelerating interest in alternatives. Sodium-ion batteries — which replace lithium with sodium, an element far more abundant — are the leading contender.
But sodium-ion energy density still trails LFP, and the cells are physically larger, limiting their use in some storage applications. In plain terms = the technology is not ready to replace lithium across the board, but prolonged high lithium prices would force its commercialisation timeline forward.
What does this mean for China's battery industry long-term?
China's LFP supply chain is deeply integrated, holding a globally dominant position across lithium carbonate, cathode materials, and LFP cells — yet the domestic market is chronically oversupplied.
A U.S. industry source notes that despite geopolitical pressure driving localisation elsewhere, dependence on Chinese-sourced materials remains high. This means → Chinese companies earn higher margins overseas than at home.
Citi argues China's battery sector must pivot toward premium LFP products, overseas expansion, and recycling. Whether ¥200,000–250,000/tonne becomes a true inflection point depends on how fast upstream mines restart versus how much cost downstream makers can absorb.
Content is for reference only, not financial advice.