Chinese battery makers are currently in a standoff, refusing to buy lithium carbonate at around CNY 160,000 per ton.
This isn't a sign of collapsing demand, but rather a calculated pause. Think of it as an 'air pocket' that often appears after a period of intense restocking. Buyers who recently stocked up are now waiting to see if prices will drop before they purchase more, keeping their on-hand inventories lean at just 10–15 days' worth.
Three key factors are driving this cautious stance. First is policy timing. The Chinese government reduced the VAT export rebate for batteries on April 1st. Many companies rushed to ship products in March to take advantage of the higher rebate, creating a temporary surge in demand. Now that the deadline has passed, April has become quiet.
Second, the signals from the final markets are mixed. While exports of New Energy Vehicles (NEVs) are strong, domestic sales in China have been sluggish. This uncertainty makes battery manufacturers hesitant to commit to large purchases of raw materials at high prices. They prefer to wait for a clearer demand picture to emerge.
Third, a sudden price shock in early March left a lasting impression. Lithium carbonate futures on the Guangzhou Futures Exchange (GFEX) plummeted by their daily limit. This sharp drop reminded everyone just how quickly prices can fall, making buyers extremely wary of purchasing at what might be a temporary peak.
Together, these elements have changed the market's perception. The CNY 160,000 price is no longer a confirmation of a strong uptrend. Instead, it's viewed as a fragile level that could easily break if restocking doesn't resume soon. The buyers are holding the cards for now, waiting for a better deal.
- Lithium Carbonate: A key raw material used to produce cathodes for lithium-ion batteries.
- Spot Price: The current market price for immediate delivery of a commodity.
- Futures: Financial contracts obligating the buyer to purchase an asset at a predetermined future date and price.