Since the beginning of this year, the price of lithium carbonate has continued to decline.

Recently, under the impact of Trump's tariffs, the price of lithium carbonate fell below 70000 yuan/ton, with the lowest price of lithium carbonate futures LC2505 dropping to 68000 yuan/ton.

Previously, Gaogong Lithium Battery analyzed the price trend of lithium carbonate. With downstream inventory adjustments and the release of upstream raw material production capacity, the volatility of lithium carbonate prices has gradually narrowed, and the increase driven by peak season has also gradually reduced. Compared to the increase in lithium carbonate prices driven by capacity upgrades in the first and second quarters of the past two years, at the time of the transition from the first and second quarters of this year, lithium carbonate prices not only did not rise, but also showed a sustained downward trend.

On the other hand, in the stable price range, since August 2024, the price of lithium carbonate has mostly remained stable at the price level of 75000 to 80000 yuan/ton. However, by the end of the first quarter of this year, the price of lithium carbonate quickly broke through the support level of 75000 yuan/ton and declined towards the price of 60000 yuan/ton.

According to the latest price data, as of April 17th, lithium carbonate futures LC2505 closed at 70500 yuan/ton, and lithium carbonate spot closed at 72700 yuan/ton.

Taking into account various factors, the impact of supply expansion is the most significant.

According to market data, the supply of lithium carbonate increased significantly in both domestic production and international imports in the first quarter. In March, the year-on-year increase in lithium carbonate production even exceeded 80%. According to customs data, domestic lithium carbonate imports in March were close to 60%.

In addition to the increment brought by the first quarter, according to the project progress analysis of domestic lithium salt manufacturers, most projects will enter production in 2025, and some already put into production projects will further ramp up production capacity in 2025.

It is reported that the first phase of the 300000 ton/year lithium mining and beneficiation system of Zijin Mining has been completed, and the second phase of the 5 million ton/year mining and beneficiation system is planned to be completed and put into operation in the second quarter of 2025; Yahua Group is advancing the construction project of the third phase lithium salt production line in Ya'an Lithium Industry, and it is expected to build a 30000 ton lithium hydroxide production line by 2025; The first phase of the 30000 ton lithium carbonate project at Zhicun Lithium Industry Hetian Base is expected to be put into operation in the first half of 2025; Xizang's Everest is promoting the lithium extraction project in the lithium carbonate salt lake with an annual output of 30000 tons, and it is expected to complete the installation of 10000 tons of devices in the first half of 2025.

In the downstream demand market, the production and sales growth rate of power batteries in the first quarter of this year is considerable. Among them, the production of power batteries in the first quarter was 326 GWh, a year-on-year increase of over 74%, and the sales volume was 217 GWh, a year-on-year increase of 51%.

From the perspective of downstream production and sales growth rate and upstream supply expansion speed, the two growth rates are relatively matched. However, due to the expected concentrated expansion of lithium carbonate production within the year, there is significant downward pressure on lithium carbonate. Recently, some leading battery manufacturers have also stated that the overall performance of lithium carbonate will still be surplus in 2025, and with the release of production projects, the price of lithium carbonate may further decline.

Overall, the price support of lithium carbonate is gradually decreasing. On the one hand, this is due to market competition brought about by supply expansion, and on the other hand, it is a fundamental shift in the bargaining position of upstream and downstream industries under the adjustment of industrial cycles.

In the short term, there is still room for a downward trend in lithium carbonate prices, mainly due to the upstream being in a period of concentrated production capacity (2025-2026). But in the long run, prices depend on the balance of supply and demand. In addition to slowing down capacity expansion in the upstream, sustained growth in downstream demand markets is also crucial.