Lithium prices poised to gain on Chinese curbs, robust demand for EVs

Lithium prices will likely rise as Chinese supply curbs and robust demand mainly for electric vehicles (EVs) are set to ease the supply glut, say analysts. 

“We have revised our 2025 annual lithium average price forecasts upwards to $10,100/tonne for Chinese lithium carbonate 99.5 per cent and $9,700/tonne for Chinese lithium hydroxide monohydrate 56.5 per cent,” said research agency BMI, a unit of Fitch Solutions.

Lithium carbonate and lithium hydroxide monohydrate are derived from brine deposits (salt lakes) or hard rock mineral ores (spodumene). 

Australia’s Office of the Chief Economist (AOCE) said the ongoing demand growth and temporary production curtailments in China resulted in lithium prices improving in the September quarter. “Spodumene concentrate prices increased from just above $600 a tonne in June, reached $1,000 in late August, before easing to around $820 a tonne in the second half of September,” it said.

Power infrastructure

Lithium hydroxide prices have seen a recovery of almost 20 per cent over the same period, rising from about $7,550 a tonne to around $9,000 in September. 

“By 2027, spodumene is expected to rise to an annual average price of around $925 a tonne, while lithium hydroxide should average about $13,250,” said the AOCE.

The Trading Economics website said lithium carbonate futures in China rose past 87,000 Chinese yuan ($12,248) per tonne in November, the highest in 14 months, amid stronger demand for batteries and power infrastructure. Prices are up over 22.5 per cent since January this year. 

BMI said the year-to-date averages for lithium carbonate and lithium hydroxide in 2025 thus far stand at $10,015/tonne and $9,582/tonne, respectively, as of November 18. After edging closer to multi-year lows at the end of June, prices embarked on a roller-coaster ride since July. This was due to tightened enforcement under China’s Mineral Resources Law, effective from July 1.

Bullish narrative

This resulted in production halts at some projects, most notably at Contemporary Amperex Technology Co. Limited (CATL)’s Jianxiawo mine in Jiangxi. 

The reignited bullish narrative, sustained by fears that more sites might follow suit, drove lithium prices to $12,262/tonne and $11,147/tonne for lithium carbonate and lithium hydroxide, respectively, on August 20.

“The market was also rattled by China’s announcement of export controls on lithium-ion battery supply chains on October 9, just before regulatory uncertainty eased in early November, as China suspended some of the critical mineral export curbs for one year,” said the research agency.

Prices have edged even higher since then, buoyed by the growing confidence of robust demand, hovering at the highest levels since June 2024, of $12,588/tonne for lithium carbonate and $11,252/tonne for lithium hydroxide, on November 18.

SQM demand projection

Chilean miner Sociedad Quimica y Minera (SQM), announcing its results last week, said lithium demand could rise 25 per cent this year compared with 2024. SQM reported its best prices for the battery metal in two years, driven by growth in electric vehicles and energy storage systems.

It raised its 2025 global lithium demand growth forecast to over 20 per cent, up from its earlier estimate of around 17 per cent.

BMI said its forecast assumes that prices will edge lower from current levels, with the balance of risks skewed to the downside. An anticipated resurgence in supply from Chinese projects before year-end is expected to temper gains and shift the supply picture again for the lithium market. 

“That said, while this is not our core view at present, a prolonged period of tighter supply and stronger-than-anticipated demand-side signals, along with sustained bullish calls from industry players, might be enough to support the current rally, posing upside risks to our outlook,” the research agency said.

Oversupply till 2030

The AOCE said rapid growth in global demand will continue, but it will not fully absorb the oversupply until early 2030s. “EV adoption and strong battery energy storage system (BESS) deployment will continue to underpin demand growth,” it said. 

BMI said still-elevated demand for lithium chemicals for use in electric vehicle (EV) batteries is expected to support lithium prices for the remainder of 2025. 

“Lithium is poised to be a leading beneficiary of the accelerating adoption of EVs over our forecast period, owing to its crucial role in battery chemistry,” it said.

The current rise bullish phase comes after three years when lithium prices soared to 575,000 yuan ($81,375) a tonne on supply woes.

Published on November 25, 2025