[SMM Analysis] January Lithium Carbonate Market: A Roller Coaster Ride Fueled by Sentiment & Pre-holiday Buying

In the first month of 2026, the lithium carbonate market experienced a retreat after a rapid rise. Starting from 120,000 yuan/mt at the beginning of the month, after a rapid surge and a brief pullback in mid-month, the price surged again in late January, breaking through the 180,000 yuan/mt mark. However, by month-end, as lithium carbonate prices retreated after the rapid rise, the monthly average price for battery-grade lithium carbonate in January was approximately 155,000 yuan/mt. Market characteristics this month included strong reluctance to sell among upstream players and increased purchase willingness from downstream buyers at relatively low price points.

I. Futures Market Review

Figure 1. Lithium Carbonate Market Price Trend in January 2026

The lithium carbonate market trend in January overall showed a pattern of rising, pulling back, and then fluctuating at highs. The market started relatively stable in early January. On January 5, the average spot price for battery-grade lithium carbonate was 119,500 yuan/mt, and the settlement price for the most-traded futures contract was 1.2656 billion yuan/mt; at that time, downstream cathode plants mainly adopted a wait-and-see approach for spot orders. However, entering mid-January, driven by futures market sentiment, the most-traded contract continuously broke through high levels. Particularly on January 12 and 13, the most-traded futures contract hit the daily limit up for two consecutive days, reaching a historical high of 174,060 yuan/mt during the session on the 13th.
The SMM battery-grade lithium carbonate price on January 12 rose 8.57% WoW from the previous working day, representing the largest price increase for the month. As prices continued to climb, the average spot price touched the monthly high on January 26, directly breaking through the 180,000 yuan mark, with an average price of 181,500 yuan/mt.
Entering late January, driven by supply-side news disruptions and the pre-holiday restocking window, volatility in the lithium carbonate market intensified. After a brief pullback on January 14, the futures market resumed its upward trend starting January 21. Lithium carbonate prices reached their monthly peak on January 26, with the settlement price for the most-traded futures contract hitting 176,940 yuan/mt, and the daily average spot price breaking through to 181,500 yuan/mt. Prices continued to fall in the final trading days of the month, with the SMM battery-grade lithium carbonate average price pulling back to 160,500 yuan/mt on the 30th.

II. Core Drivers: Sentiment Catalysis and Rigid Demand Support
Amid the price fluctuations, upstream lithium chemical plants significantly shifted their sales strategies, rapidly transitioning from increased willingness to sell spot orders at the start of the month to heightened reluctance to sell and efforts to hold prices firm in mid-to-late January. Some producers even suspended quotations when futures hit the limit up; this reluctance to sell directly pushed up the transaction price center in the spot market.
Although downstream material plants showed strong resistance to the sharply rising high prices in the short term, rigid demand became a key factor supporting prices this month as the proportion of long-term contracts was lower YoY. At high price levels, transactions driven by rigid demand continued to push spot prices higher. As lithium carbonate prices continued to retreat from their peaks, the purchase willingness of downstream material plants gradually increased. Particularly when prices fell to relatively low levels, spot order purchases to meet rigid demand and prepare stock for February increased, leading to active overall market inquiries and transactions.