Rising Lithium Supply and Weak Demand Pressure Prices in July

In July, lithium prices came under pressure as supply conditions eased while downstream demand remained weak. On the supply side, on July 7, the Jianxiawo lithium mine received its safety production license. As the world’s largest single-body lithium lepidolite deposit, it holds inferred lithium oxide resources equivalent to approximately 6.57 million tonnes of lithium carbonate (LCE). Prior to its previous suspension, the mine produced around 7,000–8,000 tonnes of lithium carbonate per month, accounting for roughly 10% of China’s monthly lithium demand. Lithium concentrate from Zimbabwe began shipping in early July and is expected to arrive in concentrated volumes by mid-to-late July. Additionally, Guocheng Lithium’s first-phase 60,000-tonne lithium salts project in Mianzhu officially commenced operations on July 12. A subsidiary of Sinomine Resource Group plans to commission its lithium sulfate plant in Zimbabwe later this year, which will have an annual capacity of 100,000 tonnes once fully operational. Meanwhile, China-funded Diamond Energy Group has already started up its 3-million-tonne-per-year lithium ore processing plant in West Africa, corresponding to an annual LCE capacity of approximately 30,000 tonnes. Between July 6 and 12, 2026, Australia shipped a total of 68,000 tonnes of lithium concentrate to China—up by 68,000 tonnes month-over-month—further reinforcing market expectations of ample future supply. On the demand side, new energy vehicle (NEV) sales figures released in early July fell short of expectations, dampening market confidence in demand growth. Cathode material producers generally adopted a strategy of restocking only at lower price levels and turned cautious when prices rose, showing little willingness to chase higher prices. Although downstream inquiries increased somewhat following the recent price correction, there remains limited appetite for large-scale stockpiling, with actual transactions primarily driven by immediate,刚需-based replenishment. Lithium market inventories remain elevated, continuing to exert downward pressure on prices.