In-Depth Analysis of the Lithium Carbonate Market for Lithium Batteries Against the Backdrop of Surging Energy Storage Demand

Since the second half of 2025, the lithium battery industry chain has experienced a sharp shift in market sentiment. After the price surge from 2022 to 2024 driven by the electric vehicle battery boom, the lithium carbonate market fell into a two-year oversupply dilemma, with lithium prices dropping to RMB 58,400 per ton in June 2025, breaking the break-even line for most manufacturers [0]. However, with the explosive growth of energy storage demand, this pattern has fundamentally changed.

From the perspective of price trends, lithium carbonate took only two months to break through the RMB 80,000 per ton break-even line, return to the RMB 100,000 per ton mark, and then surpass RMB 130,000 per ton. The upward momentum continued into 2026: on January 6, the main futures contract of lithium carbonate hit a daily limit (with an 8.99% increase), closing at RMB 137,940 per ton [0]. As of January 8, the main contract of lithium carbonate briefly reached RMB 146,000 per ton, with a cumulative increase of over 21% in 2026, making it one of the best-performing commodities in the market [0].

From the perspective of industry chain transmission, the profitability of upstream lithium mining enterprises has been significantly restored. Midstream material enterprises have benefited from the pattern of volume and price growth, with prices of products such as lithium iron phosphate and electrolyte continuing to rise. While downstream battery enterprises face cost pressure, the rapid growth of energy storage business provides strong support for their performance. Data from GGII (High-Tech Industry Research Institute) shows that China’s energy storage lithium battery shipments reached 430 GWh in the first three quarters of 2025, exceeding the total volume of 2024 by 30% [0].

The unexpected surge in energy storage demand is the core driver of this round of lithium price increases. The global energy storage market is expanding rapidly: global energy storage battery shipments are expected to exceed 650 GWh in 2025, with a year-on-year growth of over 80%; China’s energy storage system (AC side) shipments are expected to exceed 320 GWh, with a year-on-year growth of over 88% [0]. Energy storage has become a golden track with growth far exceeding that of power batteries.

More notably, energy storage has surpassed power batteries as the main driver of lithium demand growth. UBS data shows that lithium demand in the energy storage sector is expected to surge by 71% in 2025, and the growth rate is expected to reach 55% in 2026, far exceeding the expected 19% growth rate of electric vehicles [0]. The new energy storage demand in 2026 is expected to surpass that of power batteries for the first time, marking the substantial advancement of the global energy storage revolution.

Data centers (AIDC) are emerging as a new growth pole for energy storage demand. According to statistics and forecasts from GGII, the global data center energy storage market’s lithium battery shipments are expected to reach 15 GWh in 2025, and will exceed 300 GWh by 2030, achieving a 20-fold expansion with a compound annual growth rate of over 60% [0].

, Huajin Futures’ research report points out that in 2026, driven by the rapid growth of new energy installed capacity, global electrochemical energy storage demand will maintain a high growth rate. The new demand for energy storage batteries is expected to reach 250,000 tons of lithium carbonate equivalent, with a year-on-year growth of 60% [0]. This increment will exceed the new demand for power batteries for the first time, and the total global lithium carbonate demand is expected to reach 2.02 million tons, with a new demand of 495,000 tons, a year-on-year growth of 32% [0].

, due to the slowdown of some lithium mining projects caused by the previous weak lithium prices, the growth rate of production capacity will not be too fast. Currently, the main new supply comes from the expansion of domestic salt lake production and the resumption of production of lithium mica mines in Jiangxi. China’s lithium carbonate supply is expected to grow by about 59% year-on-year in 2026, while overseas supply will grow by 18%. Global lithium carbonate production will reach 2.13 million tons, with a new production of 460,000 tons, a year-on-year growth of 28% [0].

Multiple institutions have made forecasts on the 2026 lithium market supply-demand balance: Morgan Stanley estimates a global gap of 80,000 tons of lithium carbonate equivalent, UBS forecasts a gap of 22,000 tons, while the oversupply scale in 2025 is expected to be 61,000 tons [0]. Optimistic forecasts show that global lithium resource supply will grow to 2.03 million tons of lithium carbonate equivalent, while demand may rise to 2.14 million tons, creating a demand gap of 110,000 tons [0].

Driven by industry supply tightness and upstream material price hikes, the lithium battery industry chain will see a trend of volume and price growth in 2026. The annual lithium carbonate price is expected to stabilize above RMB 120,000 per ton, with a periodic high possibly exceeding RMB 150,000 per ton [0]. Copper foil prices will exceed RMB 120,000 per ton, and processing fees may rise by over RMB 1,000 per ton. The price of electrolyte rose by over 70% in 2025, and will continue to grow by 10% to 20% in the first half of 2026. The price of energy storage cells has rebounded, with an expected increase of over 5% [0].

In the first three quarters of 2025, among the 58 listed companies in the energy storage sector, the number of companies with year-on-year revenue decline decreased from 23 in 2024 to 13, and the number of companies with year-on-year decline in net profit attributable to parent companies decreased from 29 to 23. Companies such as GoodWe, Corun, Gotion High-Tech, HyperStrong, Penghui Energy, and Sungrow saw their net profit attributable to parent companies grow by over 50% year-on-year in the first three quarters of this year [0].

Key supply disruptions have a significant impact on the market supply-demand landscape. CATL’s Jianxiawo Mine has suspended production due to mining license issues, and trial production may resume in June 2026 under optimistic circumstances [0]. Yichun City in Jiangxi plans to cancel 27 mining licenses, putting pressure on domestic lithium mica supply [0]. Geopolitical risks in Mali, Venezuela and other places affect overseas mine supply, increasing supply chain uncertainty [0].

As the lithium carbonate market heats up, the enthusiasm for mergers and acquisitions in the industry has increased. Salt Lake Industry plans to acquire 51% equity of Minmetals Salt Lake for RMB 4.6 billion, with an annual production capacity of 15,000 tons; after holding the controlling stake, the annual production capacity is expected to reach nearly 100,000 tons [0]. Shengxin Lithium Energy acquired 100% equity of Murong Lithium Mine for RMB 2.08 billion, with lithium oxide resources of 989,600 tons and an average grade of 1.62% [0]. Hualian Holdings acquired 80% equity of a salt lake project in Argentina for RMB 1.235 billion [0]. CNGR Advanced Materials has laid out salt lake projects in Argentina, and is expected to control lithium resources exceeding 10 million tons of lithium carbonate equivalent [0].

The essence of premium mine acquisition reflects the reconstruction of mining right valuation. The book value of Minmetals Salt Lake’s mining right when it was acquired in 2013 was only RMB 377 million, and the current evaluation appreciation rate reaches 352.42% [0].

Multiple favorable policies have been released at the policy level. New energy vehicle subsidies have been extended: 12% subsidy for scrap and renewal (up to RMB 20,000) and 8% subsidy for replacement and renewal (up to RMB 15,000) [0]. Energy storage capacity compensation has been expanded: Hubei Province will implement a capacity compensation standard of RMB 165 per kW for 10-hour equivalent independent energy storage starting from February 1, 2026 [0]. The Mineral Resources Law was officially implemented in July 2025, listing lithium as a strategic mineral, with mining permits uniformly approved by the Ministry of Natural Resources [0]. The Central Economic Work Conference proposed to thoroughly rectify involution-style competition, which is conducive to the restoration of industry profit margins [0].

The system market pattern shows the characteristic of leading enterprises dominating the market. In the battery market pattern, mid-tier enterprises have benefited significantly, with some second-tier enterprises seeing their shipments grow by over 150% year-on-year in the first three quarters [0]. The number of OEM orders will increase significantly in 2026, and leading enterprises will compete for OEM factories [0]. The capacity utilization rate of domestic battery cells has risen rapidly, from about 70% last year to over 85%, with leading enterprises having sufficient orders and maintaining full production [0].

: The short-term increase is too large, and the risk of expected gap pullback needs to be guarded against [0]. In January 2026, affected by the centralized maintenance of leading cathode material factories, demand decreased by about 6% month-on-month, and periodic inventory accumulation may occur [0]. The weekly sample inventory of lithium carbonate has declined for 19 consecutive weeks, but destocking may be coming to an end, and inventory accumulation is highly likely to occur in January 2026 [0].

: New energy vehicle sales and energy storage installed capacity may be lower than expected, affecting the growth logic of lithium demand [0].

: Some delayed lithium mining projects may be put into production in advance, leading to increased supply pressure [0].

: The decline of new energy vehicle subsidies and adjustments to energy storage policies may affect industry sentiment [0].

: Overseas lithium mine supply is affected by changes in international relations, which may lead to supply chain disruptions or cost increases [0].

: The expected supply-demand gap in 2026 provides strong support for lithium prices, and the annual price center is expected to stabilize above RMB 120,000 per ton [0].

: The average growth rate of the energy storage market in 2026 is about 40%, which is slower than this year but still maintains high growth. The demand for lithium carbonate from energy storage is expected to exceed 500,000 tons, a 10-fold increase from the 50,000 tons demand in 2021 [0].

: Industry mergers and acquisitions are accelerating, and resource-based enterprises with lithium mineral resources and outstanding cost control capabilities have increased willingness to restart IPOs [0].

: It will become one of the largest new increment sources in the energy storage market, and it is expected that large energy storage cell shipments will account for 90% of the total by 2030 [0].

: Cell capacity continues to increase, and 1000Ah-class large cells have been mass-produced. The shipment volume of semi-solid state batteries is expected to exceed 15 GWh in 2026. The shipment volume of sodium-ion batteries is expected to exceed 10 GWh in 2026, doubling year-on-year [0].

: Lithium carbonate prices are expected to maintain a strong volatile pattern, with the main contract having a lower support range of RMB 98,000 to 100,000 per ton and an upper resistance range of RMB 130,000 to 140,000 per ton [0]. Although periodic inventory accumulation may occur, both upstream and downstream customers have inventory replenishment demand, so the downward space of prices is limited.

: Lithium carbonate is expected to be in a tight balance in 2026. If the demand growth rate exceeds 30%, the supply side will quickly fall into shortage [0]. The annual price center is expected to stabilize above RMB 120,000 per ton.

: The global data center energy storage market’s shipment volume is expected to exceed 300 GWh by 2030 [0]. All-solid state batteries are expected to be commercially applied on a large scale from 2028 to 2030 [0]. Energy storage demand shows a diversified development trend, from IDC to AIDC, from backup power to direct green power supply and source-grid-load-storage integration.

Lithium carbonate prices have rebounded strongly from the second half of 2025 to early 2026, from a low of about RMB 58,400 per ton to a high of over RMB 146,000 per ton. The supply-demand pattern has gradually shifted from oversupply to tight balance, and multiple institutions predict that supply-demand gaps of varying degrees will appear in 2026. The explosive growth of energy storage demand is the core driver of this round of market, and it is expected that new energy storage demand will surpass that of power batteries for the first time in 2026.

Upstream resource enterprises directly benefit from the rise in lithium prices, and mergers and acquisitions are accelerating. Midstream material enterprises have entered a pattern of volume and price growth, with profitability gradually restored. While downstream battery enterprises face cost pressure, the rapid growth of energy storage business provides support for their performance. Energy storage system integrators benefit from the improved industry sentiment, and leading enterprises have full orders.

Domestic policies continue to release favorable signals, including the extension of new energy vehicle subsidies, the expansion of energy storage capacity compensation, and the revision of the Mineral Resources Law. Geopolitical factors disrupt overseas lithium mine supply, and industry chain security has become a core issue.

The structural opportunities brought by the reshaped supply-demand pattern of the lithium carbonate market deserve close attention. Resource-based enterprises with high self-sufficiency rate of lithium resources and outstanding cost control capabilities have obvious competitive advantages. Among midstream material enterprises, leading enterprises with technological advantages and scale effects are expected to fully benefit from the upward industry sentiment. The high growth certainty of the downstream energy storage track is strong, and both leading enterprises and mid-tier enterprises with differentiated competitive advantages deserve attention.

This report is based on comprehensive analysis of internal analysis data and research reports from institutions such as GGII, Huajin Futures, Morgan Stanley, and UBS, providing an objective background for decision support and does not constitute investment advice.