2026, the Year of Reversal: A Great Era of Second Burst for Lithium Mining
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The rapid surge in lithium carbonate futures is pushing the lithium industry from a “presently loose” trading framework to a “forward tight” pricing logic. The contraction of capital expenditure on the supply side and deferred projects, combined with accelerated demand for energy storage, are heating up expectations for a higher lithium price center. The financial attributes dominated by futures amplify the slope and volatility of this process.
On the 24th, the main contract of lithium carbonate futures on the Guangzhou Futures Exchange rose 11%, closing at 164,900 yuan/ton. Centralized pricing in the futures market has become the most direct signal for the market.
From a price perspective, this level has entered the core zone of the 120,000-200,000 yuan/ton operating range for lithium carbonate in 2026, as predicted in an Oriental Securities research report by the Jia Yi team on February 22, strengthening the market consensus that “2026 is the turning point year.”
Oriental Securities emphasized in the report that the usual sequence of lithium market rallies is “stocks → futures → spot,” and that expectations turning points often lead fundamental turning points. The current jump in futures prices means that long-term supply-demand and policy variables are being priced in advance, possibly further affecting spot purchasing pace and inventory decisions.
Futures Ignite First, Lithium's Financial Attributes Amplify Volatility
Oriental Securities points out that since the launch of lithium carbonate futures in 2023, the financial attributes of the lithium industry have significantly increased. Price formation is no longer entirely determined by spot supply and demand, but is increasingly influenced by capital market expectations, risk appetite, and hedging behavior.
This change is backed by clear “infrastructure.” The report shows that the delivery system for lithium carbonate futures is steadily expanding, hedging participants are increasing significantly, the number of listed lithium battery companies disclosing lithium carbonate futures hedging rose from 23 in 2023 to 71 in the first half of 2025, and the position rate of general corporate clients increased from 18.50% to 49.63%. Under this framework, futures are more likely to be the concentrated outlet of expectation changes, and transmit to spot pricing through hedging and trade.
Supply: CAPEX Trough Superimposed with Approval Delays, “Effective Increment” Limited
The core change on the supply side is the “second suppression” of capital expenditure due to falling prices. Oriental Securities believes that global lithium resource capital expenditure was significantly compressed over the past two years as lithium prices declined, with core lithium companies’ CAPEX entering a cyclical trough. Their estimates show that global lithium resource capacity growth will be just 17.1% in 2024-2025, and effective capacity growth in 2026-2027 is expected to remain at 20%-25%. The increment available for release in the future is relatively limited, making a sudden surge in supply pressure unlikely.
At the same time, some domestic and overseas existing and incremental projects are affected by policies and other factors, lengthening approval and construction rhythms and causing structural delays in the supply system. The report mentions that the new “Mineral Resources Law” will be implemented on July 1, 2025, integrated with stricter mineral rights review in Jiangxi and Qinghai, raising uncertainty in domestic supply realization.
For incremental estimates, Oriental Securities expects a net supply increase of about 448,000 tons LCE in 2026, with most new supply coming from ramp-up of newly commissioned projects. Mining permits and ramp-up progress remain key variables. They also note that supply elasticity has a time lag, expecting about 35% of supply in 2026 can be released within about three months, with the remainder more dependent on ramp-up of new projects, offering limited short-term relief to supply-demand imbalances.
Demand: Energy Storage Becomes Second Engine, Structural Upgrades Lead Expectations
The key variable on the demand side is energy storage. Oriental Securities expects the global lithium industry’s direct demand scale to be about 1.94 million tons LCE in 2026, with energy storage demand entering an accelerated expansion phase where full-year demand is expected to reach about 570,000 tons LCE, a year-on-year growth of around 55%, raising demand share to nearly 30%. After 2026, energy storage demand may break through 30%, becoming the core demand area second only to power batteries.
Drivers include expansion of wind and solar installations, grid upgrade and reform, and increased reliance on electrochemical energy storage for AI-related infrastructure construction. The report also expects global new energy storage installations to reach about 900 GWh in 2026. For power batteries, lithium battery demand for power batteries is expected to reach 1.15 million tons LCE in 2026, up 24% year-on-year, and global new energy vehicle sales are expected to reach 25.58 million units.
Price: Switching from “Presently Loose” to “Forward Tight,” Center Moves Up but Elasticity Increases
Oriental Securities judges that the lithium industry completed a phase bottom in 2025 and entered an upward turning point. The essence is not simply supply-demand rebalance but pricing logic shifting from trading present looseness to trading future scarcity.
On inventory, the report shows that a destocking turning point gradually appeared in the second half of 2025, with lithium carbonate inventory falling from about 138,000 tons in mid-September to about 110,000 tons in late December. At the same time, lithium hexafluorophosphate prices serve as a leading indicator for lithium carbonate price increases.
As for price outlook, Oriental Securities expects lithium carbonate prices in 2026 to fluctuate between 120,000-200,000 yuan/ton, and notes that under tight supply and demand and phased restocking, prices may move to an even higher range, but “absolute heights or historical extremes may be hard to repeat.” Their scenario analysis shows that a lift in lithium prices will trigger supply elasticity: in the 70,000-90,000 yuan/ton scenario, 2026 supply will be 2.041 million tons LCE, actual demand (including restocking) will be 2.091 million tons LCE, resulting in a shortage; if prices move up to 90,000-120,000 yuan/ton, supply rises to 2.17 million tons LCE, and supply-demand trends toward balance with slight looseness; in the 120,000-150,000 yuan/ton scenario, supply can reach 2.349 million tons LCE, expanding surplus.
According to a previous article from Jiemen News, UBS has significantly raised its forecast for spodumene prices in 2026 by 74% to $3,131/ton, and lithium carbonate to $26,000/ton. This is based on the achievement of “triple parity” for electric vehicles and surging demand for energy storage, with global demand expected to double to 3.4 million tons by 2030. UBS believes the market has entered the third supercycle for lithium prices, and sustained supply-demand gaps will keep prices significantly above consensus.
Geopolitics and Policy: “Critical Mineral” Status Offers Extra “Options”
Oriental Securities suggests that, aside from baseline supply-demand, “options should be added.” The reason is that lithium, alongside nickel and cobalt, is listed as a key mineral by China, the US, and the EU. Policy changes in resource countries, strategic reserve activities, and proactive restocking in the supply chain may magnify the pricing of scarcity.
The report lists several policies and geopolitics, including Chile pushing mineral nationalization that may cause Tianqi Lithium’s SQM equity resources to drop by about 37%, Mexico designating lithium as a strategic mineral and banning private concessions, and Canada tightening critical mineral investment review. In North America, Lithium Americas (LAC) says the US Department of Energy (DOE) has taken a 5% stake in the company and obtained a 5% interest in the Thacker Pass project. According to Reuters, this development highlights preemptive arrangements for supply security of critical minerals.
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