CITIC Securities: Lithium Carbonate Supply Tight Through 2027 Despite Production Increases
A recent research report from CITIC Securities indicates that the lithium carbonate market is expected to experience a widening supply gap in the second half of 2026, peaking in the fourth quarter. If the industry engages in early inventory stocking, prices could reach their highest point between the end of the third and beginning of the fourth quarter of 2026. The report anticipates continued strong demand in 2027, with gradual increases in lithium carbonate production. However, it suggests that a full year of oversupply in 2027 is unlikely.
Considering the impact of key sectors such as energy storage, electric vehicles, and sodium-ion batteries, CITIC Securities forecasts lithium carbonate prices to range between 150,000 and 200,000 yuan per ton in the second half of 2026. Looking ahead to 2027, the report projects a supply-demand gap of 15,000 to 99,000 tons, representing 0.5% to 3.4% of demand. While this indicates a slightly looser supply situation compared to 2026, the market is still expected to face a deficit. Based on a 10-15 times price-to-earnings ratio for 2027, the implied lithium carbonate price for major lithium mining companies is estimated to be between 110,000 and 140,000 yuan per ton. The report advises investors to focus on companies with significant performance elasticity in lithium products, high growth rates in lithium ore production, and a substantial proportion of domestic mining assets.
The analysis from CITIC Securities suggests a persistent supply-demand imbalance in the lithium carbonate market through 2027, driven by robust demand from burgeoning sectors like electric vehicles and energy storage. Despite anticipated production ramp-ups, the report implies that the market's structural growth will outpace supply increases in the near term, supporting price levels. This outlook highlights the strategic importance of securing lithium resources and efficient production capabilities. Investors and industry participants may need to consider long-term supply chain resilience and the potential for price volatility as demand continues its upward trajectory, influenced by global decarbonization efforts and technological advancements in battery technology.
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