Lithium Prices Fall Despite EV Shipments and Heavy Trucks’ Demand Outlook

Lithium prices pulled back on May 20 as traders weighed improving supply expectations against still-tight near-term ore conditions. Mysteel New Energy data showed broad weakness across lithium carbonate indexes, with futures and spot prices both slipping during the session.

The decline did not erase the wider recovery. Juan Carlos Zuleta noted that lithium carbonate spot prices remained up 53% year-to-date and 215% from the previous major bottom, even after the latest daily drop.

Lithium Prices Pull Back

Mysteel’s lithium market newsletter showed the GFEX most-traded lithium carbonate contract at 184,400 yuan, down 3.71% from the previous trading day. The MMLC Index fell 1.34% to 187,096 yuan, while Mysteel’s battery-grade lithium carbonate price dropped 1.32% to 187,600 yuan.

The action was the same in both futures and spot references, but with a more gentle tone. Lithium carbonate futures tumbled further, signaling lower downstream demand and boosting upstream procurement, said Mysteel.

Additionally, Zuleta’s market update chart indicated that lithium carbonate was also under pressure in the spot market. He said spot prices reached $26,196, down 4.02% on the day. But, he said, prices remain 53% higher this year and 215% higher than the previous low.

The future image he posted indicated that the most traded futures contract of Li₂CO₃ dropped 2,420 yuan, or 1.30%, to nearly 183,100 yuan. The futures were lower than Mysteel’s battery-grade spot reference, though, and indicated that traders were still working out whether the newest pullback had created a lasting support level.

Supply Restarts Weigh on Sentiment

News of supplies added pressure to the listing. Mysteel stated that Mineral Resources has announced the restart of its 100% owned Bald Hill lithium mine in Australia, citing a recovery of lithium prices.

The project has a total mineral resource of over 58 million tonnes at 0.9% Li₂O. Site operations will start in late May, and mining and crushing will begin in June.

The first production of concentrates will take place in July. Mineral Resources anticipates the first shipment in fiscal 2027 Q1 and expects full production to occur in fiscal 2027 Q2.

Bald Hill is designed to produce approximately 165,000 DMT of spodumene concentrate at a grade of 5.1% Li₂O at full capacity. Now traders are waiting to see how this restart will impact the outlook for ore availability later in the year.

Brazil also joined in to talk about supply. According to Mysteel, Dazhong Mining will sell RMB 2.5 billion worth of non-public convertible bonds. The funds will be used to build the lithium carbonate expansion project, which has a capacity of 40,000 tons per year, including a project in the mining area of Lijiashan in Hunan Province.

Demand Story Still Holds

Despite the pullback, the demand outlook is important. Juan Carlos Zuleta presented a report on the electric ship and heavy trucks perspective from Tianqi Lithium, which could push lithium demand above many forecasts in the next decade.

The reason that the demand angle is important is that the majority of lithium forecasts are concentrated on the use of lithium in passenger EVs and in batteries. If adoption grows, this could be another layer if it’s heavy transport, shipping, and bigger commercial batteries.

Mysteel also commented that the lithium ore supply is still tight in the near term. The market is, however, closely monitoring the supply pick-up from the Bald Hill restart and anticipates the arrival of lithium concentrate from Zimbabwe in July.

This combination puts lithium in a precarious situation. Ore supply visibility is improving to add to the support for futures, but tight current ore conditions still support the 180,000 yuan level.

Zuleta also pointed out that the market is now in contango, as futures prices are once again higher than nearby contracts. This can be a sign that traders are no longer discounting the same shortage urgency that they did at the beginning of the rebound or that they have more expectations of finding balance later.

For the time being, lithium carbonate will determine if the most recent correction was a reset in one of the greater recoveries. The market will remain constructive if its price is held close to 180.