(Yicai Global) Nov. 8 -- The spot price of lithium carbonate has soared to a new record high due to a shortage of the raw material used to make power batteries for new energy vehicles.

The price of battery-grade lithium carbonate jumped to between CNY554,000 per ton and CNY573,000 per ton on the Shanghai Metal Exchange Market yesterday. The average price of the material was CNY615,000 per ton on the Wuxi Stainless Steel Exchange yesterday, up more than 50 percent from the beginning of the year.

There is a great domestic shortage of lithium carbonate, so spot quotations have risen, the SHMET said, adding that the market is dominated by small factories that trade small amounts of lithium carbonate at high prices.

The stockpiling of lithium salt companies also contributed to the market shortage. Ganfeng Lithium Group, a leading lithium miner, said it will not sign long-term contracts and let the market decide the prices. Tianqi Lithium can reach full capacity of lithium salt products and sell them well with the prices following the market trend, the mining giant noted. Foreign customers are mainly long-term contractors with deals of three to five years.

Carmakers plan to boost production and sales of NEVs in November and December, so lithium carbonate prices have increased, The Paper reported, citing industry insiders.

China’s lithium ore resources are mainly concentrated in some parts of Sichuan province, Xinjiang Uygur Autonomous Region, and Jiangxi province, while salt lake lithium resources are primarily located in Qinghai province and Tibet Autonomous Region. The yield in these areas is declining because of colder weather.

It is necessary to accelerate the development and use of domestic lithium resources, improve the ability of upstream mineral resources to ensure supply and stabilize prices, and enhance the battery recycling system to popularize electrification and the sound development of the industry, Wu Kai, chief scientist at Chinese battery giant Contemporary Amperex Technology, said at a forum on Nov. 3.

Editor: Futura Costaglione