China lithium prices tumble as weak EV sales, Middle East war cloud demand outlook

Lithium prices in China plunged on Tuesday as weaker sales from major electric vehicle manufacturers and escalating Middle East tensions dampened demand prospects.

The most-active lithium carbonate contract on the Guangzhou Futures Exchange fell 12.99% to close daytime trading at 150,860 yuan a metric ton, hovering near its 13% daily limit.

The decline followed reports of softer February sales from several Chinese EV manufacturers, including industry leader BYD, whose EV sales plunged more than 40% year-on-year during the month.

The Middle East conflict is expected to curb demand in the region, one of the fastest-growing markets for China’s battery energy storage system.

Demand for lithium remains steady, though temporarily clouded over the weekend. A surge in battery storage adoption has strengthened the outlook for lithium, with lithium carbonate prices soaring 130% in 2025 from last year’s lows.

Lithium has been rallying recently, supported by Zimbabwe’s suspension of lithium concentrate and raw mineral exports, before the recent price plunge in China.

(By Lewis Jackson and Dylan Duan; Editing by Sherry Jacob-Phillips)