Lithium prices charge up on China’s move to end export rebates from April

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Prices of electric vehicles (EV) battery raw material lithium are on the upswing since the beginning of this year, rising by 35 per cent as the decision of Chinese authorities to end export rebates from April has led to orders pouring in upfront. 

Currently, lithium carbonate futures contracts have topped 150,000 Chinese yuan ($21,510) per tonne.  

Canadian multi-national financial services firm Scotiabank expects a multi-year tightening cycle in the lithium market. It said the current lithium rally is only the first leg of a longer-term trend. Reports said analysts are growing in confidence over the lithium market outlook. 

Chinese bets

The Trading Economics website said signs of strong demand for power storage coincided with the outlook of capped supply. “Chinese authorities lowered export rebates for battery producers from April, driving manufacturers to front-run lithium orders,” it said. 

Australia’s Office of the Chief Economist (AOCE) said ongoing demand growth and production curtailments have led to the increase in lithium prices.  “Spodumene concentrate prices increased by over 19 per cent from September to an average of $975 a tonne at the start of December. Lithium hydroxide prices increased by more than 15 per cent over the same period to an average of over $9,750 a tonne,” it said. 

Lithium carbonate is derived from brine deposits (salt lakes). Spodumene and sub-surface brines are sources of lithium used in cathodes of lithium-ion batteries. Lithium hydroxide is obtained from lithium carbonate and is an EV battery material. 

Trading Economics said China’s bets on power and datacentre infrastructure combined with the announcement of expenditure on high power storage have lifted the outlook for lithium and other battery materials. 

China’s statement that it will double EV charging capacity to 180 gigawatts by 2026 has been viewed as a move to support lithium-rich energy storage. This has further sparked an uptrend. 

Price forecast

Scotiabank has raised its lithium price forecast to $20,000 a tonne of lithium carbonate equivalent (LCE) by 2028, with spodumene concentrate projected at $2,150 a tonne.

AOCE has projected price at $900 a tonne for spodumene and lithium hydroxide price at $10,250 tonne.  

Scotiabank said its price projections might be conservative, as most industry observers believed $18,000 to $20,000 per tonne of lithium carbon equivalent or LCE represented incentive pricing. Actual market prices may exceed these forecasts. 

It said temporary closures of lepidolite mines in China have helped to stabilise lithium prices. The surplus that has built up in the market is expected to decrease from 2027 with demand growth to remain strong. 

Market may rebalance

Reports from China said authorities there have cancelled about 25 mining permits in Jiangxi, apart from suspending Jianxiawo lithium mine operations for tackle over-capacity and price wars. 

The Australian Chief Economist Office said the market for spodumene concentrate and battery-grade lithium hydroxide, which make up Australia’s exports, may rebalance earlier even though excess supply may continue in the broader market into the early 2030s.  

“Lithium consumption growth is still expected to be largely driven by growth in EV sales – mainly in China – though strongly growing battery energy storage systems (BESS) installations will also contribute to lithium demand,” it said. 

Scotiabank said most lithium market balance outcomes point to a supply-constrained market in the medium term, even if electric vehicle demand growth slightly misses expectations or battery energy storage systems don’t grow as rapidly as anticipated.

Leading beneficiary

Research agency BMI, a unit of Fitch Solutions, said in November 2025 that lithium is poised to be a leading beneficiary of the accelerating adoption of EVs owing to its crucial role in battery chemistry. 

“China will continue to dominate the market, where policy continuity, intense price competition and rapid product refresh cycles are sustaining high-volume growth,” it said.  

 The research agency said other trends such as the popularity of battery swap stations mean that the actual number of EV batteries manufactured will likely exceed the number of EVs sold. 

“Outside of the autos sector, utility- scale batteries, portable electronics and e-mobility devices (e-bikes) will also contribute to lithium demand,” it said.

Published on January 14, 2026