[SMM Analysis] Limit Up! Limit Down! Successive Occurrences, Lithium Carbonate Prices Must Ultimately Return to Fundamentals

This week, the lithium carbonate futures market experienced a rollercoaster ride. After a continuous rise and hitting a limit-up, prices surged to a high of 102,500 yuan/mt. However, the fervent sentiment did not last; today, lithium carbonate futures prices suddenly hit the lower limit, closing at 91,000 yuan/mt.

Looking at the actual trading situation this week, the frenzy was confined to the futures. In the downstream physical market, facing the rapid price surge, downstream enterprises were very cautious, mostly adopting a wait-and-see attitude, and only making small-scale purchases based on rigid demand, leading to scarce actual transactions in the spot market. Currently, the industry is in a phase of strong supply and demand, with demand growing even faster, entering a stage of continued destocking. From a fundamental perspective, there should be some upward momentum in prices, but the sentiment-driven rally has gradually deviated from reality.

Recently, the market generally expects that ESS demand will see a "big explosion" in 2026, which has become the main catalyst for bullish sentiment. Excessive speculation has led to intense competition between financial speculation and industrial reality, with sharp rises and falls impacting both upstream and downstream sectors—eroding downstream profits and being detrimental to the long-term stable operation of the upstream.

To prevent excessive speculative risks and maintain the healthy development of the industry, GFEX issued a notice yesterday (November 20, 2025) regarding the adjustment of transaction fees and position limits for lithium carbonate futures contracts. This move aims to cool down the overheated market by increasing transaction costs and limiting positions.

Sentiment that excessively diverges from actual supply and demand will ultimately be pulled back by the gravity of value reversion.