The most-traded November lithium carbonate futures on the Guangzhou Futures Exchange hit 69,700 yuan (USD 9,835.74) per ton, the lowest since it was launched last July.
It then slightly pared losses and ended day-time trade at 71,200 yuan, down 9.8% from last Friday's close.
The decline this week was attributed to worsened macro-sentiment, analysts said.
Data showing weakness in manufacturing activities in the United States and China intensified economic worries among global investors, weighing down risk assets.
On top of that, lithium market has been plagued by rapidly growing output as previous boom prompted companies to launch new projects.
State-backed research house Antaike forecast a near 200,000 tons of lithium resources supply surplus globally this year.
China, accounting for about two-thirds of the world's lithium chemical output, saw its output increase significantly this year as ramp-ups of new projects, mainly the low-cost brine in the eastern Qinghai region.
Monthly output, estimated by information provider Mysteel, grew to 65,500 and 60,900 tons in July and August respectively, up more than 40% from compared with the corresponding period a year earlier.
Lithium futures have lost 12% from a month earlier and down 36% since the beginning of this year.
Higher demand in September and October should give the market some support, before possible further falls in the fourth quarter, said Zhang Weixin, an analyst at China Futures.
In July, China's sales of EVs and hybrids cars exceeded 50% of its total car sales for the first time, although the overall car sales dropped.
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