(WSJ) Chinese prices for lithium, considered a bellwether because of the market’s higher liquidity and active spot market, have soared since the start of the year.

Lithium carbonate, a compound of the silvery metal used in the batteries that power most of China’s electric-car fleet, has jumped 68% since the start of the year to $11,250 a metric ton.

The gradual end to lockdowns has unleashed a wave of pent-up demand for electric cars, that has whittled down surplus stocks of the metal. Government incentives have also been a boon for lithium demand.

The supply-and-demand balance for lithium fell into deficit in 2020 for the first time in years, according to commodity analysts at CRU.

A run of declining prices since 2018 has dissuaded new mining investments, leading to expectations of even tighter supplies in the near future.

But a fresh price surge could unleash a new wave of extraction.