Regulatory Tightening Causes a Sharp Drop in Lithium Carbonate Prices

February 3rd, according to news

According to the commodity market analysis system: Recently, the price of lithium carbonate has shown a significant characteristic of "first rising then falling, with increased volatility." As of February 3rd, the benchmark price for battery-grade lithium carbonate is 147,000 CNY/ton, down 14.53% from the highest point of the year (172,000 CNY/ton on January 23rd), up 23.12% month-over-month, and up 84.26% year-over-year.

Multiple factors drive the strong performance of lithium carbonate after the start of the year in China

Multiple factors are converging to drive lithium carbonate prices into a robust upward trend starting after the 2026 New Year. Among these, demand-side dynamics took center stage in early to mid-January. The policy adjustment announced jointly by the Ministry of Finance and the State Administration of Taxation on January 9 became the key factor propelling lithium prices to accelerate their upward trajectory. The announcement explicitly stated that, from April 1, 2026, to December 31, 2026, the export tax rebate rate for battery products would be reduced from the current 9% to 6%, and the value-added tax export rebate for these products would be completely abolished starting January 1, 2027. This phased reduction policy offers only a limited buffer period, directly sparking a rush among companies in the lithium-ion battery industry to boost exports, with orders for battery cells being significantly front-loaded.

Order frontloading has significantly raised the production expectations of downstream battery companies. In January, which is traditionally a low season, the lithium battery supply chain showed a "counter-seasonal boom." The production schedules of leading battery manufacturers in January increased by 30%-40% year-over-year. Some companies even canceled maintenance plans and pushed for full-capacity production. The concentrated release of downstream production demand further transmitted to the upstream lithium carbonate segment, driving the price of lithium to rise more rapidly.

Guangzhou Futures Exchange intensively cools down

In response to the severe price fluctuations of lithium carbonate, the phased regulatory policies of the Guangzhou Futures Exchange have, to some extent, alleviated market speculation, curbing the rapid rise in prices and indirectly pushing prices into a correction channel.

The relevant person in charge of the Guangzhou Futures Exchange stated that recently, there have been many uncertain factors affecting market operations, and the price fluctuations of related products have been significant. All market participants are advised to engage in the market in accordance with regulations, prudently, and rationally. Next, the Guangzhou Futures Exchange will adhere to the main theme of strict supervision and management, continuously strengthen market monitoring and surveillance, maintain a "zero-tolerance" attitude towards all types of illegal and non-compliant behaviors, and handle such behaviors strictly according to the law and regulations, effectively maintaining market order and safeguarding the safe and stable operation of the market.

Lithium carbonate data analysts believe: Considering the current market supply and demand, policy environment, and capital sentiment, it is expected that in the short term (around the Chinese New Year), the price of lithium carbonate will maintain a weak and volatile trend. In the medium to long term, it is likely to return to being dominated by the fundamentals of supply and demand, showing an upward trend with volatility. However, specific developments still need to be closely monitored for changes in market supply and demand.