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中文As time officially steps into 2026, industry experts widely anticipate that the explosive growth of battery energy storage is poised to bolster the outlook for global lithium demand this year, offering a glimmer of hope for the accelerated recovery of a lithium sector that has been plagued by oversupply in recent years.
Since the second half of 2022, the lithium market has been grappling with a supply surplus. While the price surge triggered by the EV battery boom that year stimulated a supply spike, demand has struggled to keep pace with the massive supply volume for years. However, as reforms in China’s power sector drove an unexpected surge in lithium demand for energy storage batteries in the second half of 2025, this has underpinned a cautiously optimistic outlook for the lithium market in the coming year.
Industry insiders point out that the data center construction boom in China and globally has also driven the growth in lithium demand for power storage, emphasizing that the growth rate of lithium demand in the energy storage sector exceeded expectations in the second half of 2025. Looking ahead, energy storage is likely to become a “game-changer” for the lithium market, improving its fundamentals.
Data shows that battery energy storage systems have become China’s most profitable clean technology export—recording nearly $66 billion in export value in the first 10 months of 2025, surpassing electric vehicles (approximately $54 billion).
Morgan Stanley recently projected a global deficit of 80,000 tonnes of Lithium Carbonate Equivalent (LCE) for 2026; UBS estimates the deficit at 22,000 tonnes, following an expected supply surplus of 61,000 tonnes in 2025.
According to forecast ranges provided by a survey of four unnamed analysts, global lithium demand is expected to grow by 17%-30% in 2026, while supply is projected to increase by 19%-34%. These analysts predict a lithium price range of RMB 80,000-200,000 per tonne (approx. $11,432-$28,580) for 2026, compared to the 2025 range of RMB 58,400-134,500.
Looking back at the past year, lithium prices continued to fall in the first half of 2025, hitting a yearly low of RMB 58,400 on June 23rd. As profit margins and stock prices of global miners came under pressure, some companies were subsequently forced to cut production.
However, following China’s pledge to address overcapacity in several sectors, including lithium, the Jianxiawo mine—a lepidolite mine in Yichun owned by CATL—suspended production in August last year, triggering a sharp rebound in global lithium prices in the second half of the year.
Domestic lithium carbonate prices have now soared by 130% from their low point last year—reaching RMB 134,500 per tonne on December 29, 2025, the highest level since November 2023. Spot prices assessed by information provider Fastmarkets also rose by 108% over the same period.
Behind this sharp rebound in lithium prices, besides supply tightening, robust demand from energy storage has undoubtedly played a significant role. According to estimates from UBS, lithium demand in the energy storage sector is projected to surge by 71% in 2025, with growth expected to reach 55% in 2026.
Estimates from Guotai Junan indicate that demand for Lithium Carbonate Equivalent in the energy storage sector will account for 31% of total consumption in 2026, up from 23% in 2025, thereby further eroding the market share traditionally dominated by electric vehicle batteries.
Of course, looking ahead, the magnitude of the increase in lithium prices may still be capped, as excessively high prices could undermine the economic viability of energy storage.
Other major risks mentioned by analysts include: a potential faster-than-expected migration of energy storage systems towards sodium-ion battery technology; a slowdown in EV sales that could suppress demand; and supply growth that may limit the upside for price increases.
