The fundamental situation of tight supply and demand balance for lithium carbonate has not fundamentally changed

Huawen Futures’ research report on February 5th shows that, in fact, the decline in lithium carbonate fundamentals before the holiday did not significantly change from previous highs. The main reason for today’s sharp drop in lithium carbonate is primarily due to a decline in market sentiment and regulatory resonance. The overall pullback in non-ferrous metals and precious metals has triggered a decline in sentiment. Currently, lithium carbonate prices are significantly affected by macro sentiment transmission. Recently, the overall weakness in the non-ferrous metals sector has dragged down market confidence in lithium carbonate. Expectations of strengthened exchange regulation have disrupted market liquidity. Recently, regulatory authorities have increased efforts to standardize the commodity futures market, indirectly affecting trading behaviors in the lithium carbonate market. Previously, the Ministry of Industry and Information Technology and three other ministries jointly rectified “irrational competition” in the lithium battery industry, clarifying measures to “strictly control repeated construction and curb low-price dumping.” Market expectations exist that regulatory measures (such as raising trading margin requirements and limiting position sizes) may continue in the futures market. Overall, the fundamental supply and demand balance of lithium carbonate has not fundamentally changed, but policy regulation, profit-taking at high levels before the holiday, and a decline in macro sentiment have triggered sharp downward movements. Going forward, attention should be paid to inventory changes and the implementation of export orders. The long-term industry trend remains strong.