SINGAPORE, Jan 29, 2026, 20:09 SGT — The market has closed.
- China’s battery-grade lithium carbonate price dropped 2.3% on Thursday, according to SMM data.
- SMM reported that the most-traded lithium carbonate futures contract moved sharply within a broad range while open interest declined.
- Traders eye China’s Jan. 31 PMI data alongside production plans for February ahead of the holiday.
China’s battery-grade lithium carbonate price dropped 2.33% on Thursday, slipping to an average of 168,000 yuan ($21,340) per metric ton, according to Shanghai Metals Market (SMM) data. The decline continues the retreat following this month’s earlier surge. (Metal)
This move is significant as lithium remains the key ingredient in most EV and grid batteries, with spot prices in China continuing to dictate the supply chain dynamics—from miners to cathode manufacturers. Even a fluctuation of a few thousand yuan can influence purchasing decisions, inventories, and producers’ readiness to ramp up output.
At the moment, the market is caught in a stand-off: downstream buyers remain in the hunt for material, while sellers are reluctant to push prices lower. This tug-of-war is most evident in futures trading.
The most-traded lithium carbonate futures contract held steady, fluctuating between 158,800 yuan and 173,900 yuan per ton, with open interest dropping by 8,638 lots, SMM reported. Upstream spot quotes thinned as sellers hesitated to move stock, while downstream plants stepped up purchases on price dips, partly to build February inventories. (Metal.com)
Upstream, the SMM spodumene concentrate index — a key gauge for the hard-rock ore in lithium chemical production — slipped 1% to $2,168 a ton on a CIF China basis. (Metal)
China’s lithium surge earlier this month was sparked by expectations of stronger demand, following Beijing’s announcement to scrap value-added tax export rebates on battery products. This move pressured exporters to speed up shipments and ramp up battery production in the short term, according to a Reuters report. (Reuters)
Investors are also eyeing energy storage as a potential demand driver beyond policy moves. “Looking ahead, energy storage is likely to become a game changer for lithium,” Jinyi Su, an analyst at consultancy Fubao, told Reuters earlier this month. Still, Su warned that if prices climb too high, it could undercut storage economics. (Reuters)
Calendar effects are starting to show up. China has stretched its official Lunar New Year holiday to nine days this year, from Feb. 15 to 23. That change can speed up procurement beforehand, only to slow industrial activity during the break, Reuters reported Thursday. (Reuters)
The downside risk remains clear: if February’s buying was mainly precautionary and battery orders ease up, the market could end up with excess material and weaker demand. A steeper pullback would also challenge whether producers maintain disciplined supply following last year’s price drop.
Traders are eyeing China’s official purchasing managers’ index due Saturday, Jan. 31, at 9:30 a.m. Beijing time. They’ll also watch for updates on February production plans throughout the battery supply chain. (Gov)
