On March 18, 2026, the domestic lithium carbonate futures market experienced a significant sell-off, with prices plummeting sharply. The main lithium carbonate contract LC2605 on the Guangzhou Futures Exchange opened at 155,000 yuan per tonne. After reaching an intraday high of 156,840 yuan, it trended downwards, hitting a low of 149,700 yuan. The contract finally settled at 152,300 yuan per tonne, a sharp decrease of 6,960 yuan or 4.43% compared to the previous trading day's settlement price of 157,080 yuan. Trading volume expanded to 205,884 lots, while open interest decreased by 1,180 lots to 307,662 lots, indicating that some long positions chose to exit the market following the price breakdown.
In the spot market, according to the latest data released on March 18, 2026, domestic lithium carbonate prices retreated from recent highs. The average spot price for battery-grade lithium carbonate (99.5%) was reported at 154,000 yuan per tonne, while the average price for industrial-grade lithium carbonate (99.2%) was 152,000 yuan per tonne. Both grades fell by 2,500 yuan from the previous day, representing daily declines of approximately 1.60% and 1.64% respectively.
The day's decline was not an isolated event but reflected a synchronized weakness across futures, spot, and stock markets. On the futures front, the main contract saw significant intraday losses, with technical indicators turning bearish. The spot market faced simultaneous pressure, with average quoted prices for relevant specifications falling compared to the previous day. Data indicates that the benchmark price for industrial-grade lithium carbonate has retreated from levels seen earlier in the month. Related lithium mining stocks also declined across the board, with leading companies seeing notable drops.
The sharp downturn was primarily driven by weakening market expectations and a rise in macro risk aversion. From an industry fundamentals perspective, although the current supply-demand balance has not fundamentally reversed, and social inventories remain in a destocking phase, concerns about future demand have begun to dominate. The core issue lies in growth expectations for downstream new energy vehicle sales. Market worries that a slowdown in end-demand growth will transmit upstream have led to reduced restocking enthusiasm among cathode material producers and battery manufacturers, shifting their strategy from buying on dips to cautious观望. This "buy on rallies, not on dips" psychology has further intensified a negative feedback loop in the market.
Trading activity provides direct evidence. Post-market data showed that the day's movement was primarily driven by long liquidation, indicating that previously profitable long positions chose to exit after prices broke below key support levels, becoming the main force driving prices lower. Although trading volume increased, the decline in open interest reflects a tendency towards shorter-term trading and a lack of conviction for long-term holding amid market uncertainty. Furthermore, a relatively high level of exchange warehouse receipts poses potential physical delivery pressure.
On the macroeconomic front, recent geopolitical risks have unsettled sentiment across the broader commodity market, prompting capital outflows from related sectors towards safer-haven or more certain alternatives, which also intensified selling pressure on lithium carbonate. Most domestic commodity futures closed lower on the day, creating a generally bearish atmosphere.
In the short term, the lithium carbonate market has entered a phase of weak, sentiment-driven volatility. Technically, prices need time to find a new equilibrium after breaking key support levels. Fundamentally, end-of-month sales data for new energy vehicles will be a critical validation point. If sales figures remain robust, the current pessimistic expectation-driven decline could be corrected; conversely, if data falls short of expectations, prices may remain under pressure.
The cost side continues to provide significant support. Current raw material prices remain at relatively high levels, offering a solid cost floor for lithium carbonate. Furthermore, supply is not unlimited. Industry statistics show that domestic lithium carbonate production decreased month-on-month last month. Although weekly production has recovered somewhat this month, the overall supply increase remains relatively manageable. Over the medium to long term, the growth narrative for the new energy vehicle and energy storage industries remains intact, and a tight supply-demand balance is expected to persist.
Overall, after the rapid decline, the room for further significant downside in lithium carbonate prices may be limited, but immediate reversal momentum is also lacking. The market is likely to enter a phase characterized by range-bound trading, aimed at digesting bearish sentiment. Investors should closely monitor changes in downstream production schedules and procurement patterns, the registration and cancellation of warehouse receipts, and shifts in the macroeconomic environment. Operationally, a cautious approach or range-trading strategies are advised, avoiding chasing rallies or selling into panics during emotional market swings.
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