The most traded lithium carbonate contract on the Guangzhou Futures Exchange rose 9 percent on the day and neared the upper limit, marking the strongest close since June 2024.
Li’s comments, first reported by financial news channel Cailian and later shared by Reutersalso included a projection that lithium carbonate prices could reach 200,000 yuan if demand accelerates as expected.
Traders said the lithium price reaction shows how much weight Ganfeng has in a market that has reacted quickly to any sign of stronger consumption after years of oversupply.
Chinese lithium carbonate prices have already risen more than 17 percent this month on improving sentiment in the energy storage sector and expectations that demand for stationary batteries will grow through 2026.
CATL restart boosts lithium volatility
The Chinese lithium market is also supported by the delayed restart of the lithium battery Contemporary Amperex Technology (CATL) (SZSE:300750,HKEX:3750) Jianxiawo Mine in Yichun.
The mine normally produces about 65,000 tonnes of lithium carbonate equivalent per year, about 6 percent of global supply. However, it has been closed since August after its operating permit expired.
CAT is reportedly making progress to get the mine back online, but no exact date has been given.
The shutdown also has an impact on global markets. In September, Australian lithium stocks fell sharply on signals that the restart of CATL could be approaching.
The oversupply still weighs on the lithium market
Outside of China, the broader lithium market has suffered from imbalances in 2025.
Prices rose in July and August before falling again in September, with talk of possible supply cuts by Australian miners sparking short-lived rallies despite strong inventories and growing production.
“The rise of the lithium market means it is driven by sentiment,” says Claudia Cook of Fastmarkets. wrote earlier this yearnoting how futures activity has repeatedly strayed from fundamentals.
Oversupply remains the defining theme. Global mining production has increased 192 percent since 2020, increasing inventories faster than even robust demand for electric vehicles can absorb.
While electric vehicle sales surpassed 17 million units in 2024 and are expected to surpass 20 million this year, production growth, including a 22 percent increase in mine supply in 2024, has kept the market in surplus.
Analysts have warned that the imbalance in the lithium sector could persist for the next decade unless mining slowdowns, project cancellations or unexpectedly strong demand intervene.
Beijing’s new export controls have added another layer of uncertainty.
The export controls announced last month would require Chinese companies to obtain export licenses for high-energy lithium-ion batteries, synthetic graphite anodes and critical manufacturing equipment. China has implementation delayed of these controls for one year, until November 10, 2026, as part of a deal with the US.
Against this backdrop, the US wants to increase its supply of non-Chinese lithium.
The U.S. Department of Energy released the first $435 million of a $2.23 billion loan to Lithium Americas (TSX:LAC,NYSE:LAC) in October, advancing construction of the Thacker Pass project in Nevada – which will become the largest lithium resource in the Western Hemisphere once it comes online. The project is central to Washington’s push to reduce dependence on Chinese refining and secure domestic supplies of battery materials.
For now, China remains the clearest guide to price direction. Monday’s futures jump showed how quickly sentiment can move when major producers provide firmer demand signals.
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Securities Disclosure: I, Giann Liguid, have no direct investment interest in any company mentioned in this article.
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