Price trend

According to the business data analysis system of SunSirs, lithium carbonate has experienced a "rollercoaster" market trend recently. The benchmark price of battery-grade lithium carbonate, according to SunSirs, surged from 119,400 RMB/ton at the beginning of the year to 162,000 RMB/ton on January 14th, representing a 35.7% increase in just half a month. It then fell to 147,000 RMB/ton on January 19th, a decrease of 9.26%.

Key drivers of the surge: front-loaded policy benefits + supply disruptions + concentrated release of demand.

Adjustments to battery export tax rebates triggered a surge in exports, leading to a short-term concentrated burst of demand

On January 9, 2026, the Ministry of Finance and the State Taxation Administration issued an announcement clarifying that the value-added tax (VAT) export rebate rate for battery products will be reduced in stages: from 9% to 6% starting April 1, 2026, and completely eliminated from January 1, 2027. This policy adjustment provides a clear window of opportunity for policy benefits for the industry chain, directly triggering a "rush to export" among overseas customers and domestic battery companies. The market widely expects that overseas customers will place orders in the first quarter to secure the current high 9% tax rebate benefit, while domestic battery manufacturers will need to increase production to meet the surge in export orders.

The ripple effects on the demand side quickly became apparent: downstream lithium iron phosphate cathode material companies, which had originally planned a one-month production reduction and maintenance period during the Spring Festival, were forced to cancel their plans and accelerate production to keep pace with battery manufacturers' production schedules. They even expect to maintain full capacity production in the first quarter. Most companies in the industry have lithium carbonate inventory cycles of only about 10 days, and to ensure production, they have had to increase their spot purchases, creating a chain reaction of "rushing to export - expanding production - scrambling for raw materials," directly driving a concentrated release of short-term demand for lithium carbonate and becoming the core engine behind the price surge.

Expectation of tight supply and demand

While demand surged, frequent disruptions on the supply side further intensified market expectations of a supply-demand gap. The requirement in the "Comprehensive Action Plan for Solid Waste Management" that "in principle, no new beneficiation projects without self-owned mines and supporting tailings utilization and disposal facilities will be approved" has raised concerns about the resumption of production and subsequent processing of lithium mica mines in Jiangxi (such as CATL's Jianxiawo mine), limiting the release of some lithium salt production capacity.  Upstream lithium salt producers have also adjusted their sales strategies accordingly, reducing deliveries under long-term contracts, and some companies have chosen to withhold sales and wait, further tightening the supply in the spot market.

Low inventory levels amplified upward price momentum

As of early January 2026, domestic social inventories of lithium carbonate had fallen from 44 days in the first half of 2025 to 26 days, a relatively low level. Downstream companies continued to deplete their raw material inventories, leading to a significant increase in procurement urgency. Although traders' inventories increased somewhat, much of it was locked up and unavailable for circulation in the market, further exacerbating the tight supply situation in the spot market.

Sharp decline and key turning point: Demand fell short of expectations + speculative sentiment subsided.

Sales of new energy vehicles fell short of expectations, indicating weakening support from core demand.

According to data from the China Passenger Car Association, from January 1st to 11th, 2026, national retail sales of new energy vehicles totaled only 117,000 units, a sharp year-on-year decrease of 38% and a month-on-month decrease of 67%. This is significantly lower than the market's previous expectation of a 15%-20% year-on-year increase. The sharp decline in new energy vehicle sales has directly shaken market confidence in the growth of demand for power batteries, subsequently raising concerns about the long-term demand for lithium carbonate, becoming the core reason for the price correction.

Investor sentiment was waning, and the short-term speculative logic came to an end.

During the initial surge in lithium carbonate prices, there was intense speculation and significant increases in trading volume and open interest in the futures market. However, as prices reached their peak, coupled with negative news of lower-than-expected new energy vehicle sales, market sentiment quickly shifted, and a large amount of long positions began to withdraw. Data shows that on January 16th, the open interest of the main futures contract decreased by 27,800 lots, and from early December 2025 to January 16th, 2026, the total open interest plummeted from 1.08 million lots to 826,000 lots. This concentrated withdrawal of funds directly exacerbated the price decline, acting as an "amplifier" of short-term volatility.

According to data analysts at SunSirs, the recent volatile fluctuations in lithium carbonate prices are the result of a combination of factors: short-term demand distortions caused by policy adjustments, reinforced expectations due to supply-side disruptions, and the influence of capital flows. In the short term, before the implementation of export tax rebate policies, the "rush to export" demand will continue to provide some support to prices, and lithium prices are likely to maintain a volatile but generally upward trend. In the medium to long term, the supply and demand balance for lithium carbonate may become tighter in 2026, and the average price level of lithium is expected to rise.  However, the specific trajectory will still depend on changes in market supply and demand.

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