📌 Lithium Market Outlook (2026)

Advisory Bazaar Info Services

🔹 Demand Outlook:

Rapid growth in battery energy storage is expected to keep lithium demand strong in 2026. Power sector reforms in China, expansion of data centers, and grid-scale storage projects supported demand in the second half of 2025, outperforming earlier expectations.

🔹 Supply Situation:

The oversupply pressure that has persisted since the second half of 2022 is likely to ease in 2026. However, supply growth is still ongoing, which may limit the upside in prices.

🔹 Market Balance:

• Morgan Stanley: ~80,000 tons LCE deficit in 2026

• UBS: ~22,000 tons LCE deficit

• Estimated surplus in 2025: ~61,000 tons

🔹 Demand Growth (2026):

• Total lithium demand: Expected to grow by 17%–30%

• Energy storage demand: Strong growth of ~55%

• Share of energy storage in total consumption: 31% (vs. 23% in 2025)

🔹 Price Outlook (2026):

➡️ Expected range: 80,000 – 200,000 yuan/ton

(2025: 58,400 – 134,500 yuan/ton)

🔹 Positive Factors:

• Battery storage is China’s largest clean-tech export

• Government tightening on overcapacity

• Production cuts at some mines

🔹 Risk Factors:

• Rapid entry of sodium-ion battery technology

• Slowdown in EV sales

• High prices putting pressure on the economics of storage projects

🔹 Conclusion:

👉 Lithium fundamentals look stronger in 2026, but ongoing supply growth and technology shifts could cap price upside.