Prices of lithium in China are close to a record high as a power crisis in the nation’s major hub for the vital electric-vehicle battery ingredient threatens an already-tight market.

Sichuan, home to more than a fifth of China’s lithium production, extended industrial power cuts this week amid the most intense heat wave in more than a half century. The supply disruptions in the province are set to add fuel to the battery metal’s stunning rally in the past year, with lithium carbonate prices on Monday reaching the highest level since April at 484 500 yuan ($70 610) a ton.

“We are estimating the lithium price momentum will last for a while, and the spot price for lithium carbonate will climb to 500 000 yuan per ton shortly,” said Susan Zou, an analyst at Rystad Energy. “Automakers and the battery manufacturers have to deal with this high cost.”

Meanwhile, Leah Chen, an analyst at S&P Global Commodity Insights, said the power cuts could tip the market into a bigger imbalance.

The lithium sector, critical in the clean-energy transition, is one of the industries that’s most exposed to Sichuan’s electricity curtailments. The near-record prices may also have ripple effects for downstream players, with EV battery prices already expected to tick up this year for the first time in more than a decade, according to BloombergNEF.

“Should the power cuts be extended, then that could lead to more obvious supply concerns and possibly drive lithium prices higher,” Chen said.

Tianqi Lithium, headquartered in Sichuan’s Chengdu with a production plant in Shehong city, said in a post on an online investor forum last week that it would strictly abide by the requirements of the local government and organize production in a “reasonable and orderly manner.” Chengxin Lithium Group said on the same forum Monday that it would prepare for production resuming by adjusting its maintenance plan.

“If the lithium production disruption continues for the whole of August, with the low inventories at some lithium plants, the deliveries for committed orders for September might be impacted,” Rystad Energy’s Zou said. “Some cathode producers might be forced to scale back their production because they cannot get enough lithium on time. In the worst-case scenario, it may also affect the battery makers.”