In-depth Analysis of Lithium Resource Supply-Demand Pattern and Price Inflection Point in 2026

According to industry data analysis, the global lithium resource market is undergoing a profound shift from severe oversupply to tight balance [1]. From 2022 to 2024, due to rapid capacity expansion and demand growth falling short of expectations, the market accumulated an oversupply of 400,000 tons of LCE (Lithium Carbonate Equivalent), leading lithium prices to plummet from a peak of 480,000 yuan/ton in 2022 to 70,000-80,000 yuan/ton in 2024 [1].

• 2024
  : Supply-demand gap reaches its peak (approximately 250,000 tons of LCE), and the industry is generally under pressure
• 2025
  : Supply and demand are expected to tend towards balance, and excess capacity will be gradually cleared
• 2026
  : Expected to return to a tight balance state, with a supply gap of approximately 30,000 tons of LCE

According to major producers such as Ganfeng Lithium, global lithium demand will grow by 30-40% in 2026 [2]. Rothschild Investment Bank predicts that lithium demand will continue to grow at a compound annual growth rate (CAGR) of 19% until 2030, mainly driven by the following factors:

Demand Sector	2026 Growth Forecast	Key Driving Factors
Power Batteries	+26%	Increased penetration rate of new energy vehicles
Energy Storage Systems (ESS)	+45%	Grid peak shaving + renewable energy supporting facilities
Consumer Electronics	+8-10%	Steady growth of AI devices + smart wearables

Battery demand is expected to grow by 31% year-on-year in 2026, with the energy storage sector seeing the most significant growth (45%) and power batteries growing by 26% [3]. This structural change means that the demand for lithium hydroxide from high-energy-density lithium batteries will continue to increase, while lithium carbonate demand will mainly come from lithium iron phosphate batteries and energy storage applications.

The current lithium resource market is undergoing deep adjustments:

• High-cost capacity exit
  : High-cost capacity such as African and Chinese mica mines continues to exit
• New project delays
  : Giants such as Rio Tinto slow down the progress of some projects [4]
• Decline in capacity utilization
  : The utilization rate of existing capacity has dropped to the range of 60-70%

Although overall supply growth has slowed down, there are still several incremental projects worth paying attention to from 2026 to 2028:

Project	Operator	Capacity Plan	Expected Commissioning Time
Rincon	Rio Tinto	60,000 tons/year	2028
Chile Salt Lake Project	Codelco+Rio Tinto	Continuous capacity expansion	2025-2027
Arcadium Integration	Lithium Americas	Capacity optimization	Continuously advancing

Rio Tinto plans to increase the capacity of its primary lithium business to more than 200,000 tons of LCE per year by 2028 [4].

Phase	Time	Price Characteristics	Core Logic
Price Peak	Q1-Q3 2022	400,000-500,000 yuan/ton	Supply-demand mismatch + speculation
Rapid Decline	2023	300,000 → 100,000 yuan/ton	Supply release + inventory accumulation
Bottoming Out and Consolidation	2024-2025H1	70,000-100,000 yuan/ton	Capacity clearance + cost support
Inflection Point Confirmation	2025H2-2026H1	80,000-120,000 yuan/ton	Supply-demand balance + demand recovery
Steady Recovery	2026H2-2027	120,000-180,000 yuan/ton	Tight balance + cost push

Capacity clearance is basically completed, and cost line support emerges

The supply-demand pattern confirms the shift, and inventory de-stocking is completed

Supply gap emerges, and prices enter an upward channel

Scenario	2025 Average Price	2026 Average Price	Core Assumptions
Conservative Scenario	60,000-80,000 yuan/ton	80,000-100,000 yuan/ton	Slow capacity clearance + demand below expectations
Neutral Scenario	70,000-90,000 yuan/ton	100,000-130,000 yuan/ton	Supply-demand balance + inventory normalization
Optimistic Scenario	80,000-100,000 yuan/ton	120,000-150,000 yuan/ton	Supply tightness + demand exceeding expectations

• New energy vehicle penetration rate exceeds expectations (surpassing 40%)
• Explosive growth of the energy storage market
• Resource countries strengthen export controls (e.g., Chile, Bolivia)
• Accelerated exit of inefficient capacity

• Global economic recession leads to weak demand
• Accelerated technological substitution of sodium batteries, solid-state batteries, etc.
• Supply-side capacity release exceeds expectations
• Re-accumulation of inventory in the industrial chain

• Monthly import and export data
• Changes in operating rate of lithium salt enterprises
• New energy vehicle sales data
• Bidding situation of energy storage projects

1. Supply-demand inflection point is approaching
   : It is expected to achieve supply-demand balance in 2025 and return to a tight balance pattern in 2026

2. Price bottom confirmed
   : Current lithium prices are close to the industry cost line, with limited downside space

3. Cycle inflection point is expected
   : The second half of 2025 to the first half of 2026 is the key observation period for the price inflection point

• Upstream resources
  : Focus on leading enterprises with low-cost resources (e.g., Ganfeng Lithium, Tianqi Lithium)
• Midstream processing
  : Enterprises with perfect lithium hydroxide capacity layout
• Downstream applications
  : Lithium battery and new energy vehicle industrial chain

At present, we need to pay close attention to:

• Progress of capacity clearance
• Strength of downstream demand recovery
• Inventory changes
• Policy disturbance factors

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[1] Lithium Resource Supply-Demand Balance Analysis - Compiled based on public market data
[2] Yahoo Finance - “4 Stocks Positioned to Benefit From Lithium Rebound in 2026” (https://finance.yahoo.com/news/4-stocks-positioned-benefit-lithium-123700435.html)
[3] Yahoo Finance - “Lithium watchers shift focus from supply fears to storage” (https://sg.finance.yahoo.com/news/lithium-watchers-shift-focus-supply-001521647.html)
[4] Bloomberg - “Codelco, Rio Push Forward Chile Lithium Venture” (https://www.bloomberg.com/news/articles/2025-12-05/codelco-rio-push-forward-chile-lithium-venture-calming-jitters)