Policy and supply disruptions lift lithium prices, driving cell and system prices higher

Lithium ore and lithium salt

Prices across the energy storage supply chain have continued to rise recently.

Updates as of January 20, 2026:

• Spodumene concentrate (SC6, CIF)

Price range: USD 1930-1980/MT

Average price: USD 1955/MT

Up 28.2% from the previous period

• Battery-grade lithium carbonate (spot)

Price range: RMB 147,000–154,000/MT

Average price: RMB 151,000/MT

Up 28.6% from the previous period

Trading competition in lithium carbonate  futures has intensified recently, resulting in heightened price volatility. After a rapid rally last week, lithium salt prices have seen a pronounced pullback. On the policy front, China’s Ministry of Finance (MOF) and the State Taxation Administration (STA) announced adjustments to export tax rebate policies on January 8, which lifted market expectations of front-loaded exports and accelerated production schedules, providing short-term sentiment support for lithium salts. However, price movements since January suggest that futures market capital flows and investor sentiment have exerted a stronger influence than underlying fundamentals, significantly amplifying price fluctuations. Meanwhile, lithium concentrate prices have risen in tandem with gains in both lithium salt spot prices and futures markets.

On the supply side, recent market discussions surrounding mining permit developments for lepidolite mines in Jiangxi indicate that these projects remain in the stage of mineral category adjustments and administrative approvals. As a result, there is still a meaningful lag before any physical supply can be brought to the market. Even assuming smooth progress on permitting, production resumption would still require the completion of statutory procedures, including safety and compliance approvals, as well as coordination with downstream lithium salt producers’ ore stockpiling and delivery schedules. Consequently, a material increase in spot supply is unlikely in the near term. Expectations of a delayed supply recovery from Jiangxi lepidolite mines continue to lend support to market prices.

On the demand side, downstream markets continue to show resilience despite a traditional off-season. While electric vehicle (EV) demand remains relatively low, energy storage demand is holding at elevated levels. Supported by active order inquiries, some cell manufacturers have shown a marginal increase in willingness to accept higher lithium carbonate prices. However, following the recent rapid price surge, lithium carbonate prices have entered an elevated range, prompting downstream buyers to adopt a more cautious approach to restocking. If supply-side developments become more transparent and demand enters a seasonal slowdown, lithium carbonate prices are likely to remain range-bound with heightened volatility in the near term, while facing downside risks.
 

Energy storage cells in China

Recent price quotes for energy storage cells have maintained their upward momentum. According to the latest data, prices for LFP prismatic cells are as follows:

• 100 Ah: RMB 0.395-0.465/Wh, averaging RMB 0.430/Wh (up RMB 0.028/Wh from the previous period)

• 280 Ah: RMB 0.320-0.365/Wh, averaging RMB 0.343/Wh (up RMB 0.023/Wh from the previous period) 

• 314 Ah: RMB 0.320-0.365/Wh, averaging RMB 0.343/Wh (up RMB 0.023/Wh from the previous period)

Upstream cost pressures in the cell segment have continued to intensify, with lithium carbonate prices climbing further to cyclical highs. Prices for energy-storage-grade LFP cathode materials have surpassed RMB 50,000/MT, significantly strengthening cost pass-through pressure. Against this backdrop, leading manufacturers have begun offering spot quotes on a weekly basis.

Meanwhile, recent adjustments to export tax rebate policies have fueled expectations of a short-term export rush, prompting overseas delivery schedules to be brought forward. This front-loaded export demand has provided near-term demand support, making the short-term price midpoint[Pe1.1] more inclined to rise than fall.

From a pricing perspective, increased raw material volatility has prompted wider adoption of index-linked pricing clauses in medium- to long-term contracts, tying prices to key inputs such as lithium carbonate, copper, and lithium hexafluorophosphate (LiPF₆) to avoid unilateral pricing. Notably, frame procurement prices from leading state-owned enterprises in China still imply downside potential relative to current spot highs, reflecting expectations of future easing in raw material and cell prices. However, with no clear upstream correction and supply–demand conditions still tight, cell prices are likely to fluctuate at elevated levels in the near term, with any subsequent decline dependent on easing raw material costs and a moderation in delivery momentum.
 

Energy storage system (ESS) in China

Winning bid prices for ESS have continued to rise in China. Prices are as follows, based on the latest data:

• DC-side liquid-cooled containerized ESS (2h): RMB 0.42-0.50/Wh, averaging RMB 0.46/Wh.

• AC-side liquid-cooled containerized ESS (1h): RMB 0.79-0.85/Wh, averaging RMB 0.82/Wh.

• AC-side liquid-cooled containerized ESS (2h): RMB 0.48-0.58/Wh, averaging RMB 0.53/Wh.

• AC-side liquid-cooled containerized ESS (4h): RMB 0.46-0.52/Wh, averaging RMB 0.49/Wh.

Recently, rising energy storage cell prices and cost pass-through to the system segment have lifted both system quotes and average winning bidding prices. However, system-side increases remain more limited than those in the cell segment, constrained by bidding intensity, optimization flexibility in system configurations, and integrators’ short-term cost absorption and pricing concessions.

On the demand side, recent tender launches and announcements have been limited. Meanwhile, tendering requirements continue to tighten, with higher entry and performance thresholds for integrators. Greater emphasis is being placed on proven operating track records, grid-connection and safety compliance, warranty terms, availability guarantees, and O&M responsiveness, further constraining competition based on aggressive price cuts through reduced configurations or warranties.

Notably, some forward framework procurement prices remain well below recent bid levels, suggesting that both buyers and suppliers still expect potential cost easing. If cell prices stay elevated, system quotes may continue to edge higher, though upside will remain constrained by tendering pace and competitive intensity.

China’s MOF and the STA jointly issued the “Announcement on Adjusting Export VAT Rebate Policies for Photovoltaic and Other Products” on January 8, 2026. The export VAT rebate rate for battery products will be reduced from 9% to 6% from April 1, 2026, to December 31, 2026, and will be eliminated effective January 1, 2027.

This policy will directly reduce export rebate benefits across the supply chain. In the near term, it is likely to accelerate order placement and delivery schedules, as non-Chinese buyers seek to lock in prices and shipments ahead of the rebate cut. This may intensify the rush of export and customs clearance in 2026, pulling forward part of the 2027 orders and deliveries, which will provide temporary support to overseas shipment volumes.

Over the medium to long term, the removal of export rebates will weaken the buffer for low-margin export businesses, prompting a shift away from price-led volume competition toward differentiation based on delivery reliability, quality consistency, and engineering service capabilities. Industry competition is therefore expected to evolve more rapidly toward a more rational and tiered structure.