Analysis of the Impact of Lithium Carbonate Supply and Demand and Jiangxi Mining Policies on the Valuation and Profitability of the Lithium Industry

Comprehensive Analysis

Supply and Demand Situation Correction
: The statement in the original event that “lithium battery demand in 2024 is about 1.6 million tons, with tight supply and demand balance” has not been verified. Actually, global total demand for lithium carbonate in 2024 was 974,000-1,189,000 tons LCE, while supply was 1,050,000-1,330,000 tons LCE, so the market was in an oversupply state with a surplus of 70,000-130,000 tons LCE[2][3][4][5]. However, the price of lithium carbonate stabilized at 110,000 yuan/ton in December, which is consistent with the price bottom predicted by InfoLink Consulting in October 2023[1], indicating that the price has bottomed out and stabilized.
Policy Impact Assessment
: The Yichun Bureau of Natural Resources in Jiangxi plans to revoke 27 mining rights, including lithium-bearing spodumene mines, which will have a certain impact on lithium carbonate supply[6]. The “2-4% impact on next year’s supply” mentioned in the original event has not been clearly verified, so we need to pay attention to the progress of subsequent policy implementation and the specific scope of impact.
Market Performance and Valuation
: On December 17, 2025, the main contract of lithium carbonate futures rose by more than 8%, hitting a new high since May 2024, with a cumulative increase of about 40%[6]. For lithium salt enterprises, the stock price of Ganfeng Lithium (002460.SZ) has increased by 96.04% since the start of 2025, and 104.25% in the past six months[0]. Technical analysis shows that the stock is consolidating sideways, with a support level at 61.54 yuan and resistance at 65.73 yuan, and MACD and KDJ indicators showing a bullish trend, reflecting investors’ cautious optimism about the company’s future performance[0].

Key Insights

Market Sentiment vs. Fundamentals Divergence?
: Although the market was oversupplied in 2024, the rise in lithium futures and Ganfeng Lithium’s stock price indicates that investors are more focused on the potential supply contraction brought by the tightening of Jiangxi mining policies and the expectation of a rebound after the price bottomed out, rather than historical supply and demand data.
Chain Effect of Policy Tightening
: As an important lithium resource producing area, Jiangxi’s mining policy adjustments may trigger market concerns about the lithium supply side, thereby pushing up lithium price expectations and improving the profit prospects of lithium salt enterprises.
Importance of Data Accuracy
: The discrepancy between the demand data in the original event and the actual data suggests that when analyzing the impact of supply and demand on valuation, it is necessary to clarify the data unit (such as LCE equivalent) and statistical caliber to avoid misleading judgments.

Risks and Opportunities

Opportunities
: Lithium carbonate prices have bottomed out and stabilized; policy tightening may promote the improvement of supply and demand structure. The expectation of lithium prices fluctuating upward will increase the profitability of lithium salt enterprises, thereby supporting the valuation of the lithium battery sector. Leading enterprises such as Ganfeng Lithium may benefit from policy adjustments due to their technical advantages and resource layout[0].
Risks
: The specific impact ratio of the tightening of Jiangxi mining policies on supply is not yet clear; if the actual impact is lower than expected, it may lead to a limited rebound in lithium prices. At the same time, there is still uncertainty about whether the oversupply state in 2024 can be quickly improved[6].

Key Information Summary

In 2024, the lithium carbonate market was oversupplied (surplus of 70,000-130,000 tons LCE), and the price bottomed out at 110,000 yuan/ton in December.
Jiangxi plans to revoke 27 mining rights for lithium-bearing spodumene mines, which may affect lithium carbonate supply in 2025.
Lithium carbonate futures have risen by about 40% cumulatively in 2025, and Ganfeng Lithium’s stock price has increased by 96.04% year-to-date, with bullish technical indicators.
Market sentiment is optimistic, and institutions expect lithium carbonate supply and demand to gradually improve.

Analysis of the Impact of Lithium Carbonate Supply and Demand and Jiangxi Mining Policies on the Valuation and Profitability of the Lithium Industry

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