Lithium Prices Seen Falling This Half as Chinese Supply Rebounds

Lithium carbonate prices are expected to decline in the current half of 2026 as Chinese supply restarts and Australian projects resume, outweighing demand from energy storage that has kept a floor under the market, analysts said.

The key EV battery raw material touched a six-month low of 140,000 yuan ($20,770) a tonne earlier this month before recovering about 1,000 yuan over the past week. On Tuesday, spot prices sat at 155,400 yuan, with benchmark futures at 152,000 yuan.

BMI, a Fitch Solutions unit, revised up its 2026 average annual lithium price forecasts to $20,100 a tonne for Chinese lithium carbonate and $19,600 for lithium hydroxide monohydrate after a strong second quarter. The research agency expects prices to drift lower in the second half. It cited imminent supply resurgence in China alongside project restarts in Australia.

“The balance of risks remains skewed to the downside,” BMI said. “Current price levels extend beyond what underlying fundamentals alone would justify.”

Supply Shocks Unwind

Two supply shocks drove lithium prices sharply higher from mid-2025 lows. China’s Jianxiawo mine permit lapsed in mid-2025, curbing supply to battery mineral supply chains. That was compounded by Jiangxi province revoking expired mining permits for lepidolite mines in December 2025, according to Australia’s Office of the Chief Economist (AOCE).

Zimbabwe added to the squeeze by banning exports of raw spodumene concentrate in late February 2026, following a permanent ban announced in mid-2025. On 22 May 2026, lithium was declared one of 14 critical minerals barred from export in raw form.