China's lithium market likely to see inventory drawdown in Oct

China's lithium carbonate market stalled during the eight-day National Day holiday. According to Mysteel's assessment, the battery grade and industrial grade lithium carbonate prices hovered between Yuan 72,500-74,000/tonne and Yuan 71,500-72,000/tonne respectively during the holiday.

 

On the spot market, with mainstream lithium refineries focusing on long-term orders, the spots circulating on the market were limited, putting the traders on the sidelines. On the other hand, the refineries held the prices firm and refrained from selling on the spot market.

 

On the supply side, the lithium carbonate production scheduling totals 84,900 tonnes in October, rising 1.7% month-on-month, based on Mysteel's survey. Generally, the refineries relying on outsourced feedstock have received more tolling orders, and the producers in Sichuan and Qinghai have maintained high operating rates, leading to a mild increase in overall production in October.

 

 

On the demand end, consumption in the power and energy storage battery markets was robust in August and September. In October 2025, China's lithium iron phosphate production is expected to further increase to 373,800 tonnes, with the main growth driven by capacity ramp-ups and the introduction of new products. Most companies will likely maintain stable production schedules with high operating rates, resulting in a month-on-month increase of around 5.06%.

 

 

On the other hand, the ternary cathode materials market is expected to experience a slight reduction in production but will remain at high levels in October. Currently, demand in the CATL supply chain continues to rise, with domestic consumption remaining high while exports seeing a slight decline. In October 2025, China's ternary cathode material production is projected to be 77,900 tonnes, down 4.18% month-on-month but up 36.7% year-on-year.

 

 

Overall, October is the traditional peak season for lithium-ion battery cathode materials. This October, the lithium carbonate demand is expected to reach 120,000 tonnes, setting a new record high, with a projected increase of 3.4% compared to September. On the demand side, domestic lithium carbonate production in October is estimated to be 85,000 tonnes, while imports are expected to reach 24,000 tonnes, resulting in a palpable monthly supply gap. Therefore, the lithium carbonate spot prices are anticipated to fluctuate within the range of Yuan 70,000 to 75,000 per tonne.