[SMM Analysis] Restructuring of Lithium Carbonate Supply-Demand Pattern: Industry Chain Shifts Under Policy Dividends and Resource Constraints

When we shift our perspective away from price fluctuations, we find that the lithium carbonate market in Q1 2026 was undergoing deeper structural changes. These changes were reflected not only in price movements but also in policy-driven demand, geopolitical constraints on the supply side, and the quiet transformation of lithium carbonate's role within the broader new energy industry chain.

Demand side, the expansion logic has been profoundly reshaped by policy. Chinese market, the 62.5 billion yuan trade-in policy treasury bonds directly stimulated new energy vehicle consumption, boosting purchase willingness across the entire chain from vehicles to power batteries to upstream raw materials. Markets outside China, the US tariff policy shifted from IEEPA to a unified 10% global tariff, substantially lowering tariff barriers for Chinese battery exports to the US and significantly easing cost pressure on ESS batteries. EV and ESS policies both released positive signals, jointly providing strong support for lithium carbonate demand in Q1 2026.

Supply side, the changes carry more long-term implications. In Q1, constraints on ex-China ore tightened notably. Zimbabwe announced a ban on lithium concentrates exports in February. Although temporary export quotas were subsequently granted to some Chinese-invested enterprises, the trend of resource-rich countries requiring domestic processing has become irreversible. Meanwhile, geopolitical turmoil in the Middle East pushed up international oil prices, further raising mining and transportation costs. Lithium chemical plants in China, even as they gradually resumed production after the holiday, faced dual pressures of rising raw material costs and supply uncertainty.

Looking ahead, the core contradiction in the lithium carbonate market is expected to shift from "whether capacity is in surplus" to "whether resource access is stable." Under the dual forces of continued demand expansion and normalized supply constraints, the strategic value of lithium carbonate is expected to become increasingly prominent. For industry chain participants, simply predicting price changes is not enough to cope with market shifts. Establishing stable resource channels, optimizing inventory management strategies, and enhancing cost pass-through capabilities are the keys to navigating through cycles.