Chinese buyers started restocking ahead of the Spring Festival and elsewhere, buyers were increasingly willing to pay higher prices to secure any available supply, the price reporting and research agency said.

Benchmark's weighted average lithium carbonate price rose 2.8% for the month to US$23,798 per tonne, lithium hydroxide gained 6.2% to $25,894/t and spodumene concentrate shot up 17.3% to $1,525/t.

Benchmark said lithium carbonate prices in China were beginning to breach the RMB200,00/t ($31,400/t) mark due to restocking.

Downstream demand remained robust and Benchmark has pointed to BYD selling almost 510,000 new energy vehicles between January and November, a 217% increase year-on-year.

Analyst George Miller also highlighted fierce competition for lithium assets, given market tightness and a forecast supply deficit, citing Lithium Americas out-bidding CATL and Ganfeng for Millennial Lithium and its Pastos Grandes brine project in Argentina. 

Companies are also moving to meet demand, including ASX-listed Liontown Resources confirming plans in November to bring its Kathleen Valley hard rock project in Western Australia into production a year earlier than originally targeted as it released a definitive feasibility study. 

"Given the near-term bottleneck that spodumene supply is set to have on the lithium market, accelerated production plans may provide a welcome relief to spodumene converters struggling to get their hands on feedstock, with Liontown yet to commit any of Kathleen Valley's production to offtake partners," Benchmark said.

However the rush to meet demand could see a repeat of 2018 when a glut saw the lithium price crash, as columnist Tim Treadgold warned last week.