SunSirs: Stricter Regulations Were Being Implemented, and the Price of Lithium Carbonate Plummeted

Price trend

According to the commodity price analysis system of SunSirs, the price of lithium carbonate has recently shown a significant characteristic of "rising first and then falling, with increased volatility." As of February 3rd, the benchmark price of battery-grade lithium carbonate on SunSirs was 147,000 RMB/ton, a decrease of 14.53% from the year's highest point (172,000 RMB/ton on January 23rd), a month-on-month increase of 23.12%, and a year-on-year increase of 84.26%.

Multiple factors were driving the strong performance of lithium carbonate since the beginning of the year

Multiple factors were converging to drive a strong upward trend in lithium carbonate prices starting in early 2026. In particular, the market dynamics in the first half of January were primarily driven by demand, with a policy adjustment announced by the Ministry of Finance and the State Taxation Administration on January 9th becoming a key factor in accelerating the upward trend in lithium prices. This announcement clearly stated that from April 1st to December 31st, 2026, the export tax rebate rate for battery products would be reduced from the current 9% to 6%, and that the value-added tax export rebate for these products would be completely eliminated from January 1st, 2027. This phased reduction policy provided a limited buffer period, directly triggering a surge in "export rush" activity within the lithium battery industry, leading to a significant acceleration of battery cell export orders.

The surge in orders has significantly revised upward the production expectations of downstream battery companies. January, traditionally a slow season, saw the lithium-ion battery industry experience a "boom in the off-season," with leading battery manufacturers seeing a 30%-40% year-on-year increase in production in January. Some companies even canceled maintenance plans and pushed for full-capacity production. This concentrated release of downstream production demand further transmitted to the upstream lithium carbonate sector, driving lithium prices to accelerate their upward trend.

A relevant official from the Guangzhou Futures Exchange stated that there are many uncertain factors affecting market operations recently, leading to significant price fluctuations in related products.  Market participants are urged to participate in the market in accordance with regulations, cautiously and rationally. Going forward, the Guangzhou Futures Exchange will adhere to the principle of strict supervision and management, continuously strengthen market monitoring and surveillance, maintain a "zero tolerance" attitude towards all types of illegal and irregular activities, and strictly handle illegal and irregular behaviors in accordance with laws and regulations, effectively maintaining market order and safeguarding the safe and stable operation of the market.

Market outlook

According to SunSirs' lithium carbonate data analyst, considering the market supply and demand, policy environment, and investor sentiment, it is expected that lithium carbonate prices will maintain a volatile and slightly weak trend in the short term (around the Spring Festival). In the medium to long term, prices are expected to return to being driven by supply and demand fundamentals, showing a volatile upward trend. However, specific price movements will still depend on changes in market supply and demand.

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