From 600,000 to 60,000! From "Crazy" to "Darkest Hour"! Where is the Bottom of Lithium Prices?

The price of lithium carbonate has plummeted from 600,000 yuan/mt to around 60,000 yuan/mt, with the "ankle-cutting" price once again shattering the industry's expectations for its floor price.

On May 29, the most-traded lithium carbonate futures contract fell by 2.23%, closing at 58,860 yuan/mt, a new low for the year. In terms of spot prices, according to SMM spot quotes, as of the latest quote on May 29, battery-grade lithium carbonate spot quotes fell to the range of 59,500-62,300 yuan/mt, with an average price of 60,900 yuan/mt, a decrease of 3,900 yuan/mt from 64,800 yuan/mt on May 15, representing a decline of 6.02%.

At the beginning of this year, the price per ton of lithium carbonate was still hovering around 80,000 yuan. As market prices continue to decline, doubts about where the floor price of lithium will ultimately lie are growing louder.

From "frenzy" to "abyss"

Some analysts have said, "From a cyclical perspective, lithium battery materials also follow a pattern of feast or famine, and we are now entering a cycle where prices are set to rise again."

A review shows that in the past decade, lithium prices have already experienced two cycles: The first cycle was from 2015-2019, when prices surged from 42,000 yuan/mt to 180,000 yuan/mt and then pulled back to 48,000 yuan/mt. The second cycle began in 2020, with prices nearly reaching a peak of 600,000 yuan/mt in 2022, only to fall to around 60,000 yuan/mt now, a 90% decline.

It seems that "prices will rebound after hitting the bottom" is a potential law of the industry, but the search for the floor price of lithium this time is fraught with uncertainties. As early as 2023, when prices fell to 100,000 yuan/mt, there were voices within the industry suggesting that the price floor had been reached. In March this year, there was another view that lithium prices had already bottomed out at around 70,000 yuan/mt. However, since April, lithium prices have shown an accelerated trend towards the bottom, almost weekly hitting new lows since listing.

"I feel like there's no hope," a lithium resource practitioner even used the term "abyss" to describe the continuous decline in lithium prices, stating that the current market conditions still show no signs of bottoming out.

"The company will not provide specific numerical guidance on (lithium chemicals) prices," said Jiang Anqi, Chairman of Tianqi Lithium, at the 2024 Annual General Meeting held on May 21. She believes that prices have now entered a period of bottoming out.

Where is the floor price of lithium?

To explore the floor price of lithium, one must also consider whether the factors that triggered the sharp decline in lithium prices have improved.

From the root cause of this round of sharp decline in lithium prices, supply-demand imbalance is the main reason. In recent years, driven by the rapid expansion of the power battery and ESS battery markets, the demand for lithium carbonate has grown rapidly, with lithium demand expected to increase by 270,000 mt LCE and 280,000 mt LCE in 2025-2026, respectively. However, Zhang, a lithium carbonate analyst at China Securities Futures, noted that the surge in lithium prices in 2022 spurred significant capital expenditure growth in the lithium carbonate industry, with the 2024–2026 period marking the concentrated realization of supply. According to supply-demand balance table calculations by relevant institutions, the global lithium industry's supply surplus is projected at 224,000 mt LCE, 265,000 mt LCE, and 207,000 mt LCE for 2024, 2025, and 2026, respectively.

Facing a price collapse due to overcapacity, major domestic lithium carbonate producers began implementing production cuts starting in April. Statistics from the Lithium Branch of the China Nonferrous Metals Industry Association show that China's lithium carbonate production in April 2025 totaled approximately 64,000 mt, down 2.1% MoM.

Meanwhile, the accelerated entry of low-cost overseas mines continues to impact lithium prices. Customs data reveal that lithium carbonate imports in April reached 28,336 mt, up 56.3% MoM and 33.6% YoY. Imports from Chile stood at 20,256 mt, rising 59.3% MoM and 18.1% YoY, while those from Argentina totaled 6,850 mt, increasing 47.4% MoM and 101.1% YoY.

The decline in overseas lithium mine production costs has led to significant price reductions, further depressing domestic lithium carbonate prices. For instance, Australian and African ore prices dropped from $795/mt and $741/mt to $657.5/mt and $625/mt, respectively.

Relevant institutions believe the accelerated entry of low-cost overseas mines may be reshaping the supply dynamics of the lithium carbonate market, potentially disrupting its traditional cyclical patterns. Against this backdrop, a bottoming-out and rebound in lithium carbonate prices may require more substantial capacity exits from the resource sector.

**Enterprises Seek Multidimensional Breakthroughs**

With persistently low lithium prices, finding a way out of the current predicament has become a shared challenge for the industry. Giants like Ganfeng Lithium and Tianqi Lithium are leveraging high self-sufficiency in resources, technological innovation, and industry chain integration to swiftly restore profitability.

Among them, Tianqi Lithium, the first and currently only domestic company achieving 100% lithium self-supply, stated in response to media inquiries: "We still need to mine—this remains one of our core competencies." Public data show that Tianqi Lithium's core asset, the Greenbushes mine in Australia, is the world's largest and highest-grade operating lithium mine project, as well as the lowest-cost spodumene mine. Currently, Greenbushes has an annual lithium concentrate production capacity of 1.62 million mt, with the construction of its third chemical-grade lithium concentrate processing plant underway. Jiang Anqi, the company's chairman, similarly believes that enterprises with core and sustainable competitive advantages will thrive regardless of industry fluctuations.

Ganfeng Lithium also stated at the performance briefing held on the same day that the company currently has multiple self-owned resource projects under development and in operation, including the Cauchari-Olaroz project in Argentina, the Goulamina project in Mali, and the Mariana project in Argentina, all of which are lithium resource projects with cost advantages in the long term. The company will also continue to leverage the advantages of integrated coordination in the upstream and downstream of the lithium battery industry to mitigate, to a certain extent, the impact of declining lithium prices on its business.

Compared with lithium extraction from spodumene and mica, Salt Lake Potash's lithium extraction from salt lakes offers significant cost advantages in production. According to a research report by Huayuan Securities, in 2024, the unit production cost of lithium extraction from salt lakes by Salt Lake Potash was only 36,500 yuan/mt, supporting the company to weather the downturn in lithium prices smoothly.

In fact, regardless of where the bottom of lithium prices ultimately lies, the storm of lithium price fluctuations sweeping across the industry has already had a significant impact. For lithium resource companies deeply involved, this represents both a severe challenge and a rare opportunity. It is evident from the proactive measures taken by the aforementioned companies that, amidst the difficult situation of persistently low lithium prices, enterprises have actively sought self-help through technological cost reduction, development of low-cost mines, and extension of the industry chain, demonstrating strong resilience.

In the long run, although lithium carbonate, as an important raw material for the battery and new energy industries, faces challenges such as short-term price fluctuations and market competition, its demand prospects remain broad, driven by the continuous growth of markets such as NEVs and ESS. According to estimates by securities institutions, under consumption policies such as trade-in, domestic demand for electric vehicles may exceed expectations. The lithium surplus is expected to narrow in 2025, with lithium prices likely to oscillate at the bottom range of 60,000-80,000 yuan/mt in 2025, and a rebound from the bottom is expected in 2026.