China’s Lithium Carbonate Output Surges Amid Market Volatility

China's production of battery-grade lithium carbonate reached 670,000 metric tons in 2024, marking a 45% increase from the previous year, according to data released by the Ministry of Industry and Information Technology (MIIT) on Thursday.

The lithium market continues to face turbulence, with the most traded lithium carbonate contract on the Guangzhou Futures Exchange closing at 76,140 yuan ($10,470.87) per ton on Thursday, reflecting a marginal 0.1% rise from the previous day. Prices have significantly declined since their peak of nearly 600,000 yuan per ton in November 2022, leading to widespread mine closures globally.

Despite the downturn, market analysts suggest that supply constraints may tighten this year, driven by increasing demand. China, the world’s largest electric vehicle (EV) market, has ramped up policy support to sustain growth in the sector. In July 2024, the government doubled EV subsidies, contributing to sales of over 5 million vehicles by mid-December.

The global lithium supply surplus is projected to shrink significantly, dropping to around 80,000 tons of lithium carbonate equivalent (LCE) in 2025 from nearly 150,000 tons in 2024, according to estimates from Antaike, China’s state-owned commodity data provider.

Meanwhile, China’s production of battery-grade lithium hydroxide, another key material for EV batteries, rose by 26% year-on-year to 360,000 tons in 2024, as reported by MIIT.