Lithium carbonate: Macroeconomic suppression eases, positive news sentiment fuels market rally

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Source: GF Futures Research　CSRC License No. 【2011】1292

Lin Jian’ni　Z0020770　Tuesday, March 24, 2026

Market Commentary: Today, the futures market for lithium carbonate rose overall. At the end of yesterday’s session, capital had already rushed in and quickly pushed prices higher. This morning, with the supportive effect of news developments and a slight improvement in macro sentiment, the market opened higher and remained relatively strong. As of the close, the main contract LC2605 was up 6.11% to 152940. At present, the total open interest across all weighted contracts is 593,800 lots. During the day, positions were trimmed slightly by 742 lots.

The loosening of pessimistic macro expectations repeatedly reappears, with news developments on the supply side driving sentiment

In recent days, as the fighting in the Middle East has continued, the influence of the macro environment on the non-ferrous metals sector has become more apparent, and news developments have repeatedly increased uncertainty around macro expectations. Last night, U.S. President Trump said he had postponed, for five days, “any and all” military strikes against Iran’s power plants and energy infrastructure. However, Iranian media later responded that it had not had any direct or indirect contact with Trump. As a result, commodity prices on the night session saw noticeably more volatility. With the war outlook still unclear, news today about attacks by the U.S. and Israel on Iran’s energy infrastructure and Iran’s retaliatory moves is still developing. But judging from capital reactions, the market is continuously adjusting its expectations for how the war will unfold. The previously consistent pessimistic sentiment about a recession and tight liquidity has started to ease. Trading logic in the lithium battery equity segment has also gradually shifted toward a medium-term energy substitution direction, and overall market sentiment has improved.

In addition, yesterday the market’s news regarding supply-side issues—Africa’s lithium ore export problems—also kept building, which provided some impetus to sentiment. Previously, Zimbabwe’s Ministry of Mines and Mining Industry announced that it would pause all exports of raw ore and lithium concentrate. According to information available, Zimbabwe’s export ban on ore has not yet been lifted, and negotiations between companies and local governments are still underway. At present, there is no clear result, but the negotiation process and the timeline for policy outcomes to be implemented may extend longer than previously expected. Therefore, concerns that future lithium ore imports may be obstructed in the short term—and that companies may face production cuts or shutdowns—have been amplified, and the fermentation of expectations of supply-side disruptions has helped strengthen sentiment.

Fundamentals remain resilient, with marginal changes to focus on real transmission

In recent weeks, lithium carbonate fundamentals have remained resilient, reflected in both supply and demand increasing. However, on the real-economy level, marginal drivers have weakened. Going forward, attention should be paid to how reality transmits after expectations change. After upstream salt-works maintenance ends this month, supply is gradually ramping up. Over the past several weeks, lithium carbonate production data has remained increasing week by week. In the short term, the core supply focus is still centered on the development of conflicts at the raw-material end. Demand overall maintains optimistic expectations. For the power-using end, current vehicle sales data is relatively weak, mainly due to seasonality and the impact of policy pullbacks. But terminal electricity consumption has improved significantly, and in energy storage, leading companies basically maintain full production. Downstream scheduling overall remains relatively stable. Under rigid orders, material plant utilization is expected to stay high. In March, the year-on-year and month-on-month production growth rates for cells and materials have been raised. Structurally, lithium iron phosphate shows a sharp month-on-month increase, while ternary materials are relatively weaker. In the inventory segment, destocking continues, but the marginal trend has weakened. Last week, social inventories across the whole chain decreased by 86 tons week-on-week, with the reduction amount narrowing further. Upstream smelter inventories and downstream inventories increased somewhat. Cell producers’ and traders’ inventories continued to fall.

Outlook:

The contradiction in how the macro environment affects trading of the lithium battery sector has become increasingly visible. On one hand, with macro recession and rate-hike expectations unchanged, non-ferrous metals overall remain pressured, still constraining upside space for prices. On the other hand, the trading logic of energy substitution has also been strengthened. Capital sentiment has slightly improved and may help lift the base. In addition, recently, information about disruptions on the supply side has been developing from time to time. Until results become clear, there is still room for trading. Negotiation developments should be closely tracked. Overall, macro uncertainty is still likely to affect the sector’s trading rhythm. At present, the marginal weakening of macro suppression is easing pessimistic sentiment in the market. Real fundamentals have resilience, and downside support is strengthening. However, further upside breakthroughs may still require new incremental drivers. Focus should be on clarification of supply disruption news and real transmission. In the short term, a relatively strong range-bound consolidation is expected, with the main reference at 145,000–160,000.

Risk Warning: Changes in the macro environment; supply disruptions both domestic and overseas; downstream demand falling short of expectations

Lin Jian’ni　Z0020770

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