Lithium Market Braces for New Chinese Export Controls Amid Shifting Supply Landscape

Lithium Market Faces Changing Dynamics as China Imposes New Export Controls

The lithium market is undergoing significant shifts following China’s announcement of new export controls on lithium-related products. These measures, set to take effect in November 2025, will impact high-performance lithium-ion batteries, cathode materials, and related manufacturing equipment. With global demand for lithium rising due to the energy transition and electric vehicle (EV) boom, this move by China adds new complexity to the global supply chain.

Market Trends: Oversupply and Price Fluctuations

The lithium market has experienced an oversupply in recent years. High supply from Australian spodumene mines, along with China’s rapid growth in lepidolite and brine production, has kept inventories at elevated levels. This abundance has led to a sharp decline in lithium prices since 2022. On October 10, the lithium carbonate spot price in China was between 72,500-73,000 yuan per tonne, a steep drop from over 590,000 yuan per tonne in November 2022.

Despite some production cuts and delays in expansion projects, the market remains oversupplied. Analysts have raised concerns about short-term supply shocks, which could help move the market toward a balance between supply and demand. This has drawn increased attention to China’s export control policies and their potential to impact lithium supply chains globally.

Impact of China’s Export Controls on Lithium Technology

China’s Ministry of Commerce has imposed new export controls, requiring exporters to obtain licenses before shipping lithium-related products. These controls cover high-performance lithium-ion batteries, advanced cathode materials such as lithium iron phosphate (LFP), and critical manufacturing equipment. The new regulations do not constitute an outright export ban but instead introduce stricter approval processes.

The aim of these controls is to prevent technology transfer to foreign competitors and reduce risks associated with dual-use technologies. Specifically, China’s move targets next-generation high-energy-density cells, such as semi-solid-state and all-solid-state batteries, rather than mainstream battery technologies like LFP and NCM (Nickel-Cobalt-Manganese) cells.

Speculation Surrounding Lithium Supply Restart Projects

Amid these regulatory changes, speculation continues to swirl around the potential restart of key lithium projects. A major topic at LME Week 2025 was the potential resumption of CATL’s Jianxiawo lepidolite project in Jiangxi province. Local media reported that the project might restart sooner than expected. Though CATL has not made an official statement, the speculation about an earlier restart could increase lithium supply in the market.

In addition, Zange Mining’s Qarhan salt lake project in Qinghai province has been granted the necessary permits for resumption. While mining activities have not yet restarted, the potential increase in raw materials supply could further pressure lithium prices in the short term.

 

SuperMetalPrice Commentary:

China’s new export controls on lithium technology introduce significant risks to the global supply chain. As the market deals with oversupply and price fluctuations, these controls could complicate partnerships between Chinese producers and Western battery makers. Additionally, while the restart of major domestic lithium projects may ease some supply pressures, the broader impact of China’s export policy could slow the flow of critical materials. Investors and market participants should closely monitor these regulatory shifts as they will likely influence lithium prices and supply dynamics in the longer term.