Lithium prices in China slide as EV demand slows and war adds uncertainty

Lithium prices in China fell sharply on Tuesday, pressured by weaker electric vehicle sales and rising tensions in the Middle East that clouded demand expectations. The most-active lithium carbonate contract on the Guangzhou Futures Exchange dropped 12.99% to 150,860 yuan per metric ton at the close of daytime trade, nearing its 13% daily limit.

The slide followed reports of softer February sales from several Chinese EV makers, including market leader BYD, whose electric vehicle sales declined by more than 40% year-on-year during the month. Market participants said the Middle East conflict could reduce demand in the region, which has been one of the fastest-growing markets for China’s battery energy storage systems.

Despite the latest decline, underlying demand for lithium remains stable, though sentiment was affected over the weekend. Stronger adoption of battery storage systems had earlier supported prices, with lithium carbonate rising 130% in 2025 from last year’s lows. Prices had also been buoyed by Zimbabwe’s suspension of lithium concentrate and raw mineral exports before the recent drop in the Chinese market.