Since the beginning of September, the price of lithium carbonate, which had just rebounded to around 160,000 yuan per tonne, has taken a downward turn. According to data from Shanghai Steel Union, the quotation for battery-grade lithium carbonate fell to 142,800 yuan per tonne on September 8th, a clear retreat from the 159,300 yuan per tonne recorded at the end of August, representing a drop of 9% since the start of the month.
The decline in the futures market has been even more pronounced, with the main lithium carbonate contract for January 2027 closing at 143,500 yuan per tonne on the same day, a monthly decrease of 10.6%. On September 4th, this contract plummeted by as much as 7.41% in a single day.
The sudden shift in market sentiment is closely tied to two pieces of news. Firstly, Shanghai Metals Market, also known as SMM, adjusted its statistical methodology for lithium carbonate inventories, resulting in a one-time increase of more than 90,000 tonnes in reported inventory data. Secondly, there were market rumors suggesting that some lithium battery companies had revised down their production schedules for September. These developments have disrupted market expectations, leading to a sharp decline in lithium carbonate prices.
It is worth noting that the actual impact of these two bearish factors remains a subject of debate. Qian Yi, a senior researcher at Xinwo Information, told reporters that the physical inventory of lithium carbonate has not actually increased, and that the month-on-month growth in lithium battery production schedules for September is still expected to be around 5% to 6%, which is broadly in line with previous market expectations. Furthermore, an industry source also stated that apart from Contemporary Amperex Technology Co. Ltd. (also known as CATL), no other lithium battery companies have been heard to be revising down their September production plans.
"Golden September" Turns into "Surprise September"
The adjustment to SMM's lithium carbonate inventory statistical caliber triggered a sudden shift in market sentiment. In the afternoon of September 3rd, SMM released its weekly lithium carbonate inventory data, showing that the weekly inventory drawdown had narrowed significantly compared to the previous week, alongside an increase in weekly production. SMM also announced that, effective from September 4th, it would adopt a new inventory statistical methodology. While making minor corrections to the original data for upstream smelters, cathode material manufacturers, and other segments, the new methodology expands the sample to include traders, cell manufacturers, and other downstream segments, while also adding production sources such as lithium extracted from bauxite residue, tungsten ore by-product lithium, and aluminum electrolysis waste residue.
Following this adjustment, SMM's weekly lithium carbonate inventory was revised upwards in one go to 169,300 tonnes, an increase of approximately 90,000 to 100,000 tonnes compared to the previous data, which was over 70,000 tonnes under the old methodology. In its announcement, SMM explained that as market participants have continued to increase, the representativeness of the original inventory data had diminished, prompting the improvement in statistical methods. SMM also explicitly cautioned that there is a certain degree of incomparability between the old and new methodologies, and that the relevant data is derived from public information, market communication, and comprehensive analysis using internal models, provided for reference only.
However, in the futures market, capital reacted swiftly to this news. Cinda Futures pointed out that the significant upward revision of inventory data has, to a certain extent, fueled pessimistic sentiment, leading to a considerable decline in the market. "The market had originally expected a tight supply situation, but this suddenly changed to a state of no immediate tightness," Qian Yi noted. Some funds, which had been waiting to re-initiate short positions after lithium carbonate rebounded to 160,000 yuan per tonne, found that the SMM inventory upward revision and production schedule cut rumors provided a new trading logic for bears.
Looking at the price trajectory, lithium carbonate has experienced multiple peaks and troughs in the first quarter of 2026, clearly illustrating a tug-of-war between bulls and bears. In the second quarter, prices initially rose before falling. According to Shanghai Steel Union data, after breaking through the 200,000 yuan per tonne mark in mid-May 2026, lithium carbonate lost its upward momentum. Over the following nearly three months, prices remained in a single-direction downward trend, eventually breaking below the 140,000 yuan threshold in early August. After climbing back to 150,000 yuan per tonne in late August, prices briefly touched 160,000 yuan before failing to hold that level. Entering September, lithium carbonate prices have rapidly declined.
From the perspective of the actual industry chain, a change in inventory statistics methodology does not necessarily mean that 90,000 to 100,000 tonnes of lithium carbonate have genuinely entered the market in the short term. Xinwo Information's analysis suggests that when combining visible and invisible inventories, the industry's actual inventory has been around 150,000 tonnes all along. Therefore, the greater impact of this adjustment lies in changing the market's perception of inventory levels, rather than altering the physical inventory that already exists.
The Mystery of Production Schedule Revisions
The reported downward revision of September production schedules by lithium battery companies is another bearish factor. A source from a leading lithium company revealed that apart from CATL, no other lithium battery enterprises have been heard to be revising down their September production plans. Recently, news that CATL had revised down its September production schedule by 5% was interpreted by the market as a sign of weakening new energy demand, reinforcing expectations of lower lithium carbonate prices. However, when reporters reached out to CATL for comment, the company had not confirmed this information by the time of publication.
Xinwo Information described this round of market movement as a combination of "Empty City Strategy" and "Borrowing Arrows with Thatched Boats": the former refers to production cut rumors suppressing demand expectations, while the latter refers to the near-100,000-tonne one-time increase in reported lithium carbonate inventory following the statistical methodology adjustment. Together, these factors rapidly turned market sentiment pessimistic.
Prior to the significant drop in lithium carbonate prices in September, several institutions had believed that continued inventory declines, the onset of peak season demand, and strengthening spot basis would provide support for lithium prices. Therefore, this round of decline is actually testing a core question: do the previously assessed low inventory levels and robust demand remain valid?
Price Center of Gravity May Shift Lower
Based on feedback from companies, there has not been a pronounced shift in the industry chain's outlook for second-half demand. At the end of August, Ganfeng Lithium Co. Ltd. responded to investors by stating that signs of peak season demand had begun to appear in the short term, with orders remaining full. It added that supply-side uncertainties remain significant, and coupled with the currently low industry inventory levels, lithium prices have fundamental support. The company also stated that its current lithium product inventory is at a relatively low level and that it will maintain safety stock levels, with future price trends primarily determined by the interplay between supply-demand dynamics and inventory.
Similarly, Tianqi Lithium Corp. has maintained its previous assessment, predicting that the global lithium supply-demand relationship will remain in a state of tight balance overall in the second half of 2026. The company believes that overseas resource supply may still be affected by factors such as policy and logistics, and that some restart projects will require a certain period to transition from announced restart to actual supply. It noted that the addition of new resources, capacity release, end-user demand, and inventory changes warrant continued observation.
The spot market provides another signal. Cinda Futures noted that market demand remains robust, with a persistently strong basis between spot and futures prices, reflecting that spot supply is gradually tightening. As the peak season arrives, overall inventory levels remain at relatively low positions, and the pattern of strong supply-demand dynamics has a high degree of certainty.
Previously, Xinhu Futures forecast that lithium carbonate prices could remain in the 140,000 to 170,000 yuan per tonne range in the short term. However, the futures market is clearly beginning to trade expectations for a more distant future. Qian Yi believes that the September to October peak demand season represents a critical window for observing lithium carbonate price trends. If prices remain under pressure during that period, the difficulty of breaking back above 200,000 yuan per tonne will increase significantly. "The 140,000 yuan level is currently a strong support level. Looking ahead, we need to monitor the resumption of production at maintenance-shutdown lithium salt plants, the progress of imported ore arrivals, and whether export volumes from South American lithium resources recover. The price center of gravity for lithium carbonate may gradually shift lower next year."
A more pessimistic assessment comes from Mo Ke, founder of Zhenli Research, who told reporters, "Lithium prices are ultimately determined by demand. The price of nearly 210,000 yuan per tonne in mid-May essentially marked the inflection point for this round of lithium futures prices. In the coming period, falling lithium prices will become the dominant theme, and prices may drop to the 100,000 yuan per tonne range by the end of the year."
From this perspective, there are currently two different pricing logics at play in the lithium carbonate market. On one side, the spot market continues to show peak season demand, low inventories, and a relatively strong basis. On the other side, futures capital is beginning to price in expectations of demand weakening after the peak season and the prospect of increased future supply.