Since July 2021, the Lithium market in China has consistently maintained bullish sentiments for three quarters straight. The prices of Lithium Carbonate achieved continuous gains straight for 9 months, even though by the last week of March, the producer's quotations for the Lithium Carbonate fell for the first time in the Chinese domestic market, witnessing a drop of USD 157 per tonne, on 30^th March. In response, it levies its impact led to decrement in the global benchmark prices of Lithium Carbonate by USD 78 per tonne. This market development is majorly attributed to the uncertainties at the terminal end, easing supply tightness and sentiments to sell off the previous inventories. The transactions at the spot market expanded amidst the competitive environment in the complete industry chain.

In addition, several market participants stated that the overall production outlook in the Chinese domestic market gained significantly as compared to February. At the time when the government norms and the restriction imposed due to the Winter Olympics. The market sentiments were bearish, and on the demand side, the second quarter is usually the offseason for the car sales, whereas sales for several EV models were halted amidst the cost pressure for the raw materials. Although, the car companies are currently making no major changes and constantly inquire about the new battery orders amidst the competitive environment to capture a larger market share despite acknowledging its downside risk. The supply-demand outlook for the overall Lithium salt has been marginally narrowed as the procurement urgencies declined.

As per ChemAnalyst, the supply of upstream Spodumene is likely to remain restricted amidst the limited availability of ore, while several market participants were anticipating that the supply of mica will stabilize in the upcoming period. Whereas the inspection carried out by the Chinese authorities on the soaring prices of downstream products strengthened the will of the domestic players to actively participated in the market activities.