China’s announcement that it will roll back value-added tax export rebates caused lithium prices to soar on Monday.
Investors are now betting that the move will spur front-loaded export demand.
The most-active lithium carbonate contract on the Guangzhou Futures Exchange closed at its daily limit, surging 9% to 156,060 yuan a metric ton, the highest since November 2023, Reuters said.
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Investors and analysts expect exporters to accelerate overseas shipments ahead of the tax rollback.
China’s finance ministry on Friday said the VAT export rebates for battery products would be cut to 6% from 9% from April and then rolled back entirely from January 1, 2027.
The policy is expected lift battery output in the near term, while underscoring Beijing’s longer-term push to curb excessive involution-style competition [excessive price-cutting], analysts at Chinese broker Orient Securities said.
While the rebate applies to battery exports rather than lithium carbonate itself, analysts said the rush to ship batteries ahead of the deadline would lift near-term battery output, in turn boosting demand for lithium.
Lithium prices in China have been on the rise since mid-2025 and soared 167% from last year’s low, bolstered by Beijing’s pledge to crack down on manufacturing overcapacity.
The halt of production at battery giant CATL’s Jianxiawo mine, as well as an outlook for a boom in demand from the energy storage system are also pushing prices higher.
- Reuters with additional editing by Jim Pollard
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