(Yicai) March 26 -- Firms in the lithium carbonate supply chain need to work together to create a unified pricing system for the compound used in making lithium-ion batteries so as to help the sector develop in a healthy way, the president of Chinese mining giant Tianqi Lithium has told an industry event.

Breaks in the battery supply chain are possible because upstream and downstream businesses use different pricing mechanisms for lithium carbonate, Xia Juncheng said in a keynote speech at the ongoing Fastmarkets Battery Raw Materials Conference Shanghai 2026.

Mines and lithium-salt suppliers use lithium carbonate futures as the pricing anchor for input and product prices, while cathode material and battery producers use spot prices, Xia said, noting that a wide gap between the two can squash profitability at midstream companies.

Over about four months, the main futures contract for lithium carbonate surged to nearly CNY178,000 (USD25,780) per ton from CNY73,000 (USD10,570) per ton last October, while spot prices moved much less. Some estimates put the price difference at as much as 17 percent, forcing cathode material suppliers to respond by temporarily halting production.

Several leading suppliers announced stoppages at the end of last year under the pretext of factory maintenance to avoid losses, Xia pointed out.

Firms choose pricing mechanisms to suit their own interests, Xia said. Upstream suppliers seek higher premiums by riding futures price swings, while downstream firms want stable input costs, leaving midstream cathode makers caught in between, absorbing the mismatch and its risks, he noted. This is unhealthy for the industry as a whole, Xia said.

He called on businesses across the industry chain to consider prices and trading activity in both the futures and spot markets, break down information barriers between upstream and downstream players, and jointly build a more universal pricing system for lithium carbonate.

Chengdu-based Tianqi Lithium has been offering clients both spot- and futures-based pricing benchmarks since the start of the year, helping them avoid profit pressures from overly wide futures-spot spreads, Xia said.

Editors: Tang Shihua, Futura Costaglione