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Lithium prices in China dropped to 115,400 CNY per tonne on Oct. 12, a 5.68% daily decline and a 16.77% fall over the past month, though still 57.87% above a year ago. The slide was triggered by a methodological change by industry group SMM that doubled reported Chinese stockpiles by 175,000 tonnes, creating a perception of ample supply. At the same time, Australian producers Mineral Resources and Core Lithium have restarted the Bald Hill and Finniss mines, adding further output to the market.
The price dip also reflects broader market dynamics: the Guangzhou Futures Exchange contract, which peaked at 209,880 yuan/tonne in May, has fallen roughly 50% to about 104,740 yuan after a recent 10% drop, marking its weakest level since Dec. 2025. Chinese lithium carbonate inventories have shrunk by about 44% from early June to end‑September, but the SMM inventory revision temporarily lifted reported stocks, unsettling traders.
Why it matters: lower Chinese spot prices tighten margins for domestic refiners, many of whom control ~75% of global lithium refining, and could accelerate cost‑pass‑through to battery manufacturers. The combination of refreshed Australian supply, revised Chinese inventory data, and policy pressures such as the EU‑China cap on hybrid imports and reduced NEV export rebates amplifies the bearish outlook.
What to watch next:
- Upcoming inventory data releases to see if the SMM revision holds or reverses.
- Further production updates from Bald Hill and Finniss as they ramp up output.
- Policy shifts, especially any new export controls or subsidies in China and the EU, that could reshape supply‑demand balances.
- Analyst forecasts pointing to a recovery to around 125,739 CNY/tonne by quarter‑end and 137,925 CNY/tonne within a year, suggesting a potential rebound if supply tightens or demand picks up. [[1, 2]]