On October 12th, lithium carbonate experienced a intraday decline of 5.8%, falling to 114000 yuan/ton, reaching its lowest point of the year. At the same time, the main lithium carbonate contract 2701 (LC2701) on the Guangzhou Futures Exchange opened at a low of 115500 yuan/ton, and briefly hit the limit down during trading, with a low of 104680 yuan/ton. The final closing price was 104740 yuan/ton, a daily decline of 11.79%, setting a new low for the year and the first time since December 19, 2025 that it closed below the 110000 yuan/ton mark.
Supply increment expectation, peak season demand falsification resonance
On the supply side, news of the resumption of lithium mining production in China has landed intensively, and the expectation of long-term incremental growth has suddenly strengthened.
On October 11th, Jiangte Electric announced that the company had received the “Review Opinion on Safety Facilities Design for the 3 Million Tons/Year Mining Project of Qiankeng Lithium Mine in Yifeng County, Jiangxi Province” issued by the National Mining Safety Supervision Bureau, and agreed in principle that its safety facility design had passed the review. As a result, Qiankeng Lithium Mine has entered a key stage of construction in accordance with the law. The theoretical annual production capacity of the mine is about 15000 tons of lithium carbonate equivalent.
At the same time, the world’s largest single lithium mica mine, Jianxiawo Lithium Mine, has restarted the approval process after its environmental impact assessment was revoked. Its full production capacity can reach 100000 tons of lithium carbonate equivalent per year.
Overseas, the shipment of lithium concentrate from Zimbabwe is gradually resuming, and the production of lithium mining projects in Brazil is also being replenished. The key lies in timing mismatch: most of these projects will not form actual production until 2027 or later, and the increment itself does not change the current spot balance, but directly lowers the valuation center of the far month contract.
Demand side: Insufficient quality during peak season, further disturbance caused by export policy expectations.
In September, the retail sales of new energy passenger vehicles in China reached 1.084 million units, a year-on-year decrease of 16.7% and a month on month increase of 7.8%; From January to September, the cumulative retail sales were 7.758 million vehicles, a year-on-year decrease of 12.8%.
On the overseas front, the EU plans to set an annual import cap of 350000 hybrid vehicles for non European countries. The measure will take effect as early as December 1st, with 350000 vehicles in the first year and an annual increase of 6% from the following year, for a period of four years; The Chinese side has clearly opposed replacing multilateral rules with “voluntary export restrictions”, which has undermined market confidence in the sustainability of demand for lithium iron phosphate.
Overall, this round of decline is a switch in pricing anchors, rather than a collapse of real supply and demand. The news on the supply side changes the expected supply after 2027, while the data on the demand side changes the assumption of next year’s demand growth rate. The far month contract completes valuation compression ahead of schedule while spot prices remain tight. This also explains why the drop in spot prices during the same time period is less than half that of futures prices. Currently in the peak demand season, the supply and demand pattern remains tight, and market support still exists. It is expected that prices will mainly fluctuate in the short term.
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