Why is the lithium market showing 'strong reality, weak expectations' and what does it mean for Q4 pricing?

The lithium market is caught between strong spot fundamentals and persistent fears of future oversupply. Spot prices have climbed steadily, with battery-grade lithium carbonate at 151,600 yuan/ton in late August 2026, while futures trade at a premium of over 6,000 yuan/ton, signaling tight near-term supply. Inventories have been drawn down for 16 straight weeks, with the latest weekly destocking of 7,516 tons. Supply constraints are real: several Jiangxi lepidolite mines remain shut pending license renewals, the Jianxiawo mine's environmental approval was withdrawn, and Zimbabwe's export curbs have cut feedstock availability. However, futures prices are capped by expectations of new capacity coming online in 2027. A Jiangxi field survey in late August found producers optimistic about Q3 due to pre-winter stocking, but divided on 2027 as tax rebate changes and supply additions create uncertainty.