From 200,000 to plummeting to 160,000! Are these just superficial phenomena? The most tense moment in the lithium market has not yet arrived.

Recently, the continuously declining price of lithium carbonate has led the market to wonder: Will the lithium price eventually fall and trigger a new downward cycle?

According to data from Tonghuaixin iFind, on June 18th, the spot price of battery-grade lithium carbonate (99.5%) was reported at 167,250 yuan per ton, down by 2,250 yuan per ton compared to the previous day, with a decline rate of 1.33%. In the past week, although its price rose by 750 yuan per ton cumulatively, the increase rate was 0.45%, but in the past month, it dropped by 19,250 yuan per ton cumulatively, with a decline rate of 10.32%.

The latest daily report from the commodity data provider Mysteel also shows that on June 18th, the spot price range of lithium carbonate for batteries was 161,500 – 171,200 yuan per ton, a significant decrease of approximately 3,950 yuan per ton compared to the previous working day.

From the perspective of price trends, in May, the price of lithium carbonate in China had already shown a pattern of rising and then falling.

The latest information from the Lithium Industry Branch of the China Nonferrous Metals Industry Association shows that in May 2026, the price of battery-grade lithium carbonate dropped from 177,500 yuan/ton at the beginning of the month to 173,500 yuan/ton at the end of the month, a decrease of 2.3%; the price of industrial-grade lithium carbonate dropped from 174,500 yuan/ton at the beginning of the month to 170,500 yuan/ton at the end of the month, a decrease of 2.3%; the closing price of the main contract dropped from 199,400 yuan/ton at the beginning of the month to 179,740 yuan/ton at the end of the month, a decrease of 9.9%. The price difference between futures and spot was approximately 0.2 - 2.0 thousand yuan/ton.

In terms of the trend over the interval, on May 6th, the main contract of lithium carbonate futures closed at 199,400 yuan/ton, with an increase of 7.31%. On May 13th, the price reached its peak of 209,900 yuan/ton during the trading session, setting a new high within two years. Subsequently, the price experienced a correction and continued to decline.

In just over a month, the price of lithium dropped from 200,000 yuan to 160,000 yuan. Has the price really "peaked" again?

From the surface of the data, the above arguments seem to be sufficiently convincing. Apart from the decline in prices, at the inventory level, the Lithium Industry Association shows that as of the end of May, the inventory of lithium carbonate in the Guangzhou Futures Exchange was 54,195 tons, an increase of 16,183 tons compared with the previous month. Additionally, after the expansion of the statistical sample by a third-party institution, the hidden inventory became explicit, and the news of an additional 36,000 tons of inventory "appearing" once caused market panic. In terms of supply, the two mining projects in Australia, Finniss and Bald Hill, have recently resumed production, and Zimbabwe has decided to relax the previous ban on lithium exports. The resumption of mining in Australia and the increase in supply from Africa seem to be forming a narrative.

When these data are combined, it is easy for people to come to the conclusion that the lithium price has peaked and the turning point has arrived. However, various viewpoints indicate that this is not the case.

The inventory data has been "misinterpreted". Yu Shuo, an analyst from Chuanyuan Futures, believes that the recent divergence between "increased warehouse receipts" and "continuous reduction of social inventory" is not contradictory. "Warehouse receipts are another form of inventory. The increase in warehouse receipts essentially means that the social circulation inventory has shifted from the spot market to the futures delivery warehouse. We cannot directly determine a weakening of the fundamentals based solely on the warehouse receipt data."

The expected increase in supply has been significantly overestimated. Just as the market was concerned about the increase in Australian mines and those in Zimbabwe, a crucial piece of data was overlooked. In May 2026, Chile's lithium carbonate export volume was 19,100 tons, a 35.2% decrease compared to the previous month. Among this, the lithium carbonate exported to China decreased by 40.8% compared to the previous month. This represents approximately 9,000 tons of lithium carbonate, which will accelerate the domestic lithium carbonate de-stocking process.

The demand side has not weakened but has remained strong. Ganfeng Lithium disclosed during an institutional research session that from January to April 2026, the market demand remained robust, and there was a shortage of electric cell products. The company's energy storage electric cells continued to operate at full capacity, with a capacity utilization rate close to 100%. According to incomplete statistics from Battery Network, in the first half of June alone, enterprises officially announced contracts in the energy storage field (including electric cells and systems) exceeded 180 GWh. Behind this figure lies an industrial wave driven by the synergy of policies, demand, technology, and the global market.

Although the current lithium price is under short-term pressure, many institutions have made judgments about the future trend that are completely opposite to the "peak theory".

Martin Jackson, the head of CRU's battery materials market, stated clearly: "The most critical moment for the market has not yet arrived." CRU predicts that the average price of lithium carbonate in the third quarter will rise from the current $22,800 per ton to $33,900. Benchmark Minerals Intelligence expects the price this year to reach $30,000, while analysts at Citigroup predict that the price could reach as high as 250,000 yuan, most likely occurring in August or September.

Ganfeng Lithium also believes that the current lithium market is characterized by supply disruptions and strong demand, with lithium prices showing a strong performance and having clear fundamental support. The supply-demand relationship is in a state of tight balance. Due to the persistently low lithium prices over the past 2 to 3 years, the industry lacks large-scale capital expenditures, and there remains uncertainty regarding the release of supply.

A research report by Zheshang Securities pointed out that the global lithium supply and demand situation is in a tight balance. This is mainly due to the high demand for lithium batteries in the downstream sector. The release of lithium resource production capacity has slowed down and is facing short-term disturbance risks. It is expected that the tight balance trend will continue from 2026 to 2027, supporting the upward movement of the central price of lithium carbonate.

In summary, this round of lithium price correction is, on the surface, the result of the combined effect of increased supply expectations and the explicitization of inventory. However, at a deeper level, this is a concentrated release of market sentiment rather than a fundamental reversal. The disturbances on the supply side have not yet subsided, while the demand for energy storage is growing by nearly double and the demand for battery power continues to be highly prosperous. The second engine of demand is running at full speed.

As CRU has stated, the most critical moment for the market has not yet arrived. The lithium price will not fall at this point. On the contrary, the real test may still lie ahead.