Analysts at SDIC Securities indicate that a supply-demand gap will provide short-term price support for lithium carbonate, potentially extending the industry's high-profit cycle. The structural tight balance in China's lithium carbonate market is expected to persist, with forecasts suggesting a supply deficit of approximately 46,782 tonnes by 2026.
Rising oil prices in 2026, combined with deepening electricity market reforms, are anticipated to further boost the penetration rate of new energy vehicles and expand energy storage installation capacity. This dynamic is expected to strengthen the support for lithium carbonate prices from downstream demand. The firm recommends focusing on companies with strong cost-control capabilities, abundant mine production capacity, and well-established global resource layouts.
On the supply side, SDIC Securities projects total lithium carbonate supply in China to reach 1.7248 million tonnes in 2026, a 42.77% year-on-year increase. Domestic production is estimated at 1.3938 million tonnes, up 43.63%, while net imports are forecast at 331,000 tonnes, a 39.28% rise. In terms of production methods, spodumene remains the primary source, accounting for 57.88% of production by June 2026, followed by lepidolite at 11.99%, salt lake brine extraction at 17.82%, and secondary recycling at 12.30%.
Imports also serve as a key supplement to domestic supply. In June 2026, China's lithium carbonate imports totaled 25,900 tonnes, representing 18.32% of the combined domestic output and imports, with supply highly concentrated in Argentina and Chile. Looking ahead to the second half of 2026, supply-side disruptions are expected to ease. Zimbabwe has resumed exports of lithium concentrate, though the arrival time remains uncertain, and Contemporary Amperex Technology Co Ltd's Xiawo lithium mine has regained its safety production license, paving the way for a steady increase in supply.
On the demand side, downstream consumption remains robust, with the battery sector as the primary driver. According to SMM, domestic lithium carbonate consumption in China reached 1.2297 million tonnes in 2025. SDIC Securities estimates that demand will grow to 1.7716 million tonnes in 2026, a 44.07% year-on-year increase. Power batteries and energy storage batteries are the main growth engines for lithium carbonate consumption.
In the power battery segment, the rising penetration rate of new energy vehicles is steadily expanding demand for lithium carbonate. The firm, based on related research, forecasts that power battery capacity will grow to 1,000, 1,341, and 1,651 GW·h by 2026, 2030, and 2035, respectively, corresponding to lithium carbonate consumption of 700,000, 938,700, and 1.1557 million tonnes. For energy storage batteries, electricity market reforms and green electricity direct connection policies are driving rapid growth in installed capacity, positioning this segment as the second growth engine for lithium carbonate demand. SDIC Securities projects energy storage battery capacity growth to reach 750, 1,200, and 1,600 GW·h by 2026, 2030, and 2035, respectively, with corresponding lithium carbonate consumption of 525,000, 840,000, and 1.12 million tonnes.
Beyond power and energy storage batteries, traditional industrial applications such as consumer batteries, glass ceramics, and lubricants also contribute to lithium carbonate demand, though their overall impact remains limited. Risks to the outlook include weaker-than-expected downstream demand, supply releases exceeding forecasts, macroeconomic disruptions, global trade conflicts, and potential estimation errors.
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