Spring market action is underway! Amid concentrated supply disruptions, is lithium carbonate aiming for the 200,000 yuan mark?

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A single ban in Zimbabwe has ignited a long-prepared backlash.

On February 25, Zimbabwe's Ministry of Mines suddenly announced the suspension of all exports of raw ores and lithium concentrates, including goods already in transit, citing the need to regulate mineral supervision and export order. Following the news, the main contract for lithium carbonate on the Guangzhou Futures Exchange surged more than 11% the next day, breaking through 160,000 RMB/ton.

It is worth noting that the latest research report from Guosen Securities points out that the pace of production recovery for Australian lithium mines is relatively slow—a period of at least a quarter is expected from plans to actual output, while the South American "Lithium Triangle" countries of Argentina, Bolivia, and Chile are discussing the formation of a lithium resources coordination mechanism similar to OPEC to regain the pricing power of global lithium resources. Disruptions on the supply side are intensifying in a dense rhythm.

Guosen Securities gives a direct target: short-term lithium carbonate is expected to rise above 200,000 RMB/ton. The logic behind this judgment is the simultaneous tightening of both supply and demand: the stimulus from the supply rebound is limited and interruptions are frequent, while the unexpected boom in energy storage batteries is filling the seasonal gap in power batteries—the two act in concert on a market where the inventory cycle is less than one month, which significantly amplifies price elasticity.

If the lithium market of the previous two years was paying for past overexpansion, then this sharp rebound foreshadows a new cycle in the making. Synthesizing the latest observations from Guosen Securities, Orient Securities, Morgan Stanley, and other institutions, we find the industry’s pricing logic is undergoing a profound change—shifting from trading the current “relaxed reality” boldly toward trading a “tight future.”

Behind this spring rally is the interweaving of black swans and gray rhinos on the supply side, a strong relay of exploding energy storage demand on the demand side, and the pulsating amplification of industrial expectations by financial attributes.

How big is the short-term impact of Zimbabwe’s ban?

According to Wind Trading Desk, Morgan Stanley specifically articulated the issue in its latest quick commentary: Huayou’s Arcadia project with a 50kt LCE lithium sulfate capacity is expected to start production at the end of the first quarter of 2026; China Mining Resources’ Bikita project with 30kt capacity is scheduled for mid-2027; Shengxin Lithium and Yahua Group’s downstream processing capacity are still in the planning stage. In other words, Zimbabwe’s current legally exportable capacity in the form of lithium sulfate will be only 25kt LCE in 2026, rising to 60kt LCE in 2027.

This means that even if the ban is a temporary regulatory measure, it affects not just compliance procedures—mining companies that haven’t built downstream processing plants almost cannot bypass export restrictions and continue normal shipments in the short term.

Guosen Securities notes that subsequent export developments will need negotiations between companies and local governments, and it is "currently impossible to assess the timing." This uncertainty itself will affect buyers’ procurement pace and inventory decisions.

In terms of volume, 219kt LCE accounts for about 11% of global supply, not a disruptive gap, but with inventories extremely low, any temporary supply cut will trigger restocking demand, further amplifying price elasticity.

“Lithium OPEC”—not just hype

Zimbabwe’s ban and the moves toward a South American “Lithium OPEC” have emerged almost simultaneously, entailing a concentrated market pricing of supply sovereignty risks.

Argentina, Bolivia, and Chile possess the world’s largest known lithium brine reserves, but in recent years, pricing power has been mostly in the hands of multinational mining companies and downstream lithium salt producers. The logic of “Lithium OPEC” is to coordinate export quotas and access policies, reclaiming pricing power from buyers.

Although still at the conceptual stage, some analysts believe this means lithium resources are rapidly being regarded as strategic assets, shrinking the room for purely market-based pricing.

According to Wallstreetcn.com, Orient Securities in their earlier reports also listed geopolitical policy variables, including Chile’s push for mineral nationalization (possibly leading to Tianqi Lithium’s equity resources in SQM decreasing by about 37%) and Mexico’s classification of lithium as a strategic mineral while banning private concessions. These variables won’t directly impact output in a quarter or two, but as “options” on pricing, they will persistently compress expectations of supply flexibility.

Analysis suggests that valuation of these geopolitical and policy variables does not depend on minor changes in present supply and demand, but acts more like option pricing on “scarcity narratives”—when an event is triggered, the premium can be realized quickly, as demonstrated by Zimbabwe’s ban.

Supply side: Price rebounded, but why isn’t supply increasing?

Guosen Securities reviewed the current status of major global lithium suppliers and concluded: the effect of lithium price rebound in stimulating supply is significantly lagged in time.

Australian mines: Production capacity of projects in operation (Greenbushes, Marion, Wodgina, Pilgan Plant, etc.) is stable, but most closed projects (Ngungaju, Cattlin, Bald Hill, Finniss, etc.) are only under review for restart, and “from plan to actual output will take at least over a quarter.” The Australian mining capacity cleared out in the last downcycle generally faces higher costs than the market expects—old mines have declining ore grades, some are switching from open-pit to underground mining, and new projects face high initial costs, making restarts difficult.

South American brine: Since 2023, Argentina has successively seen the launch of five projects—Cauchari-Olaroz, 3Q, Centenario Ratones, Hombre Muerto, Mariana—doubling its annual lithium capacity. But ramp-up progress has been below expectations. For example, at Arcadium Lithium’s brine site, unit lithium carbonate costs are generally around USD 6,500/ton, much higher than around 2020—Argentine hyperinflation has eroded cost advantages, and ramp-up cycles for new projects are longer than expected.

Domestic lepidolite mines (China): Disruptions aren't over yet. The new Mineral Resources Law effective July 1, 2025, lists lithium as an independent mineral, so mines that previously held “ceramic clay” mining licenses need to reapply. CATL's Jianxiawo project shut down in August 2025; although it has now obtained a lithium mining license, it still needs to reapply for a safety permit and there is “no conclusion yet” on when it can restart. In the Yichun area, seven more lithium mines are in similar license conversion processes and “may also experience temporary shutdowns.”

Estimates by Orient Securities confirm this judgment: About 35% of supply can be released in about 3 months in 2026, with the rest relying on new projects ramping up—offering limited short-term supply-demand relief.

Demand side: Energy storage becomes the strongest variable

The core driver of lithium demand in 2026 is not electric vehicles, but energy storage.

InfoLink data shows global energy storage cell shipments reached 612.39GWh in 2025, up 94.6% year-on-year; in Q4 alone, shipments exceeded 200GWh for the first time. Entering 2026, the momentum continues: domestic energy storage battery cell output was 63.02GWh in January, up only 0.8% month-on-month; in February—affected by the Spring Festival—SMM estimates output fell 8.8% m-o-m, but considering the short month and long holiday, the drop shows utilization rates remain high.

Guosen Securities expects global energy storage battery shipments to hit 900GWh in 2026, a nearly 50% increase year-on-year, corresponding to about 540,000 tons LCE of lithium carbonate demand, up about 50% year-on-year.

More critically, energy storage demand is now the most sensitive lever in the supply-demand balance: for every 100GWh increase in shipments above 900GWh, an extra 60,000 tons of lithium carbonate will be needed, creating a marked supply gap for the lithium industry.

Power battery demand cooled early in the year—purchase tax waivers for new energy vehicles were cut in half, and seasonality played a role, with January domestic NEV output and sales down 39.4% and 44.7% month-on-month, respectively. But the China Association of Automobile Manufacturers forecasts that 2026 domestic NEV production and sales could reach 19 million units, up 15.2%, with the European market expected to grow 28.4%. Guosen Securities believes power battery demand will rebound quickly from March, with full-year growth still around 20%.

Inventory below one month; price elasticity significantly amplified

Inventory is the most direct support for the recent trend in lithium prices.

SMM data shows domestic lithium carbonate social inventory peaked above 140,000 tons in July 2025, covering about 1.5 months of consumption; by December it fell to 110,000 tons, but monthly demand had risen to about 130,000 tons, pushing the inventory cycle below a month; as of February 12, 2026, inventories further declined to about 103,000 tons and the cycle keeps shrinking.

Guosen Securities’ supply-demand balance table shows that global lithium supply (including recycling) in 2026 will be about 2.02 million tons LCE, with demand around 2.017 million tons LCE; essentially balanced, but with no marginal buffer. The problem is, supply is “low at the front, high at the back,” and demand is distinctly seasonal—spring’s busy season coincides with the period when supply is most restricted, so a temporary mismatch is certain to happen, just a question of how large.

Orient Securities’ scenario analysis provides a reference point: when lithium carbonate trades at 120,000–150,000 RMB/ton, supply could reach 2.349 million tons LCE—entering surplus; at a low price range of 70,000–90,000 RMB/ton in 2026, supply would be only 2.041 million tons LCE, but genuine demand (including restocking) would reach 2.091 million LCE—indicating shortage. Current prices at about 165,000 RMB/ton mean the market is trading on “shortage driven by restocking,” not waiting for the spot market to balance supply and demand.

Another new variable deserves attention: from April 2026, the lithium battery export tax rebate will drop (from 9% to 6%), and will be fully eliminated from January 2027. This policy window is creating a “rushing to export” effect—manufacturers are inclined to concentrate shipments before the rebate ends, which objectively accelerates demand frontloading and further compresses inventory space.

Pricing logic leap: from “trading present liquidity” to “trading future scarcity”

Behind this market rally, there’s an even more important logic: the financial attribute of lithium has strengthened significantly.

Orient Securities acutely captured this industrial evolution: since the launch of lithium carbonate futures on the Guangzhou Futures Exchange, lithium’s financial properties have been greatly enhanced. The current price surge is, in essence, the capital market pricing in “future scarcity” in advance. With lithium salt inventory cycles in China now under one month, any disturbance is magnified by financial instruments.

Since lithium carbonate futures was launched in 2023, the number of listed battery companies involved in hedging rose from 23 to 71 in the first half of 2025, and the proportion of general corporate clients’ open interest jumped from 18.5% to nearly 50%. The futures market is now deep enough to support more expectation speculation—the transmission chain of “stock→futures→spot” is becoming complete, long-term supply-demand shifts are priced in early, influencing spot purchasing pace.

This surge in the futures market reflects this mechanism: market participants are not trading the current supply glut, but locking in future tightness.

200,000—endpoint or starting line?

Guosen Securities sees a “short-term rise above 200,000 RMB/ton” as plausible: low inventory, concentrated supply disruptions, and demand peak season—all together from late Q1 to early Q2 2026.

But beyond 200,000, institutions differ greatly. According to Wallstreetcn.com, UBS has raised its 2026 lithium carbonate forecast by 74% to about $26,000/ton (~190,000 RMB) and sees a “third super cycle” with demand doubling to 3.4 million tons by 2030. Orient Securities is more cautious, giving a range of 120,000–200,000 RMB/ton while warning that “previous extremes are unlikely to be replicated.”

The key difference is in estimates of supply elasticity. The optimistic scenario sees “Lithium OPEC” and policy tightening keeping supply from reacting quickly; the pessimistic view believes Australian mines and new South American projects will ramp up if prices exceed a certain point.

Notably, Guosen Securities’ supply-demand table shows that 2027 global lithium supply is expected to surge to 2.475 million tons LCE, creating a surplus of about 32,000 tons—in other words, prices above 200,000 may be a window, not a new equilibrium.

Risk warnings and disclaimerMarkets are risky; investment requires caution. This article does not constitute personal investment advice and does not take into account individual investor objectives, financial situation, or needs. Readers should consider whether any opinions, views, or conclusions in this article suit their specific circumstances. Investments made based on this information are at the reader’s own risk. ```