Things are looking up for lithium prices as Chinese companies return to the market after a period of working through existing inventories, helping to end a monthslong slide.

The move higher will likely be gradual, as opposed to the record spike the market saw in 2022 when prices surged amid a bullish outlook for electric vehicle battery demand, increased market-led contract pricing mechanisms and sanctions that crimped the supply into Europe from Russia after it invaded Ukraine.

Since then, expectations for electric vehicle adoption growth have been tempered by high prices amid inflation, range anxiety, concerns about resale value and...