(Yicai Global) March 21 -- Prices of lithium carbonate, a lithium salt used as a raw material in electric car batteries, have risen at a slower pace this month and are likely to decline in the second quarter of the year as supplies increase, according to industry insiders.

The price of lithium carbonate for industrial use was CNY475,400 (USD74,700) a ton on March 18, while that for battery use was CNY499,600 a ton, both little changed from a month earlier, Securities Times reported today, using data from commodity information website 100PPI.

Lithium salt prices have been rising in China, and that of lithium carbonate in particular has jumped to about CNY500,000 a ton from CNY250,000 a ton since the start of 2022.

Prices will gradually stabilize as companies increase their supplies, according to Zhang Xiang, a researcher at the Research Center of Automobile Industry Innovation of the North China University of Technology, noting that “they will not go up further this year.”

There are many sources of lithium carbonate and China has abundant lithium ore resources, Zhang added.

Government officials met with downstream companies in the lithium battery industry chain last week to ask them to put more effort into balancing supply and demand, getting lithium prices back to a “rational” level, and ensuring supplies, according to a statement put out by the Ministry of Industry and Information Technology on March 18.

Lithium carbonate prices have been gradually stabilizing recently thanks to government regulation and increased supply, said Zhu Yuanzhi, professor at the School of Mechanical and Materials Engineering of the NCUT. But as they are still subject to long-run supply and demand, it is necessary to find alternative sources of battery materials and ways to recycle existing materials, he added.

As of yesterday, more than 10 listed Chinese lithium salt firms had reported steep profit gains in the first two months of this year, buoyed by soaring lithium carbonate prices.

Net profit at Yongxing Special Materials Technology surged 650 percent to CNY490 million (USD77 million) in the period from a year ago, it said on March 16. Its lithium business made about CNY420 million, up about 3,700 percent, accounting for more than 85 percent of total earnings.

Editor: Futura Costaglione