Lithium carbonate futures surged 166%, with energy storage companies using hedging strategies worth hundreds of billions of yuan to strongly control prices!

Recently, lithium carbonate prices have surged, and energy storage companies are once again "busy" calculating their investment returns. This abnormal price volatility has finally impacted the application end of the energy storage market.

It's worth noting that many energy storage companies are no longer passively accepting these raw material price fluctuations; instead, they are choosing to actively participate in lithium carbonate futures trading, and some companies have even gained additional profits as a result.

Irrational fluctuations in lithium carbonate futures?

Since June 2025, the price of lithium carbonate has been rising more and more sharply, and in 2026 it has been rising every day. On January 5, it rose to 133,000 yuan/ton, on January 6 to 141,300 yuan/ton, on January 7 it broke through the 150,000 yuan/ton mark, and on January 12 it reached 156,000 yuan/ton. As of the latest news on January 13, the main lithium carbonate futures contract hit the upper limit, with a single-day increase of 12%, closing at 179,000 yuan/ton.

As a core raw material for battery energy storage, lithium carbonate futures will impact the energy storage industry's production and operation, pricing models, competitive landscape, and supply chain synergy through price guidance, risk management, and resource allocation. First, it will shape long-term price expectations, guiding the expansion pace of upstream lithium mining companies and adjusting inventory levels for midstream and downstream companies, thus affecting the economic feasibility calculations of energy storage projects. Second, some lithium battery-related companies will use lithium carbonate futures for hedging, locking in raw material purchase prices and ensuring gross profit. Third, it will force the exit of inefficient production capacity in the energy storage industry.

Conversely, if lithium carbonate futures prices are driven up by short-term speculative buying and selling, the wrong signals may lead to disorderly capacity expansion, high bargaining costs, and suppression of downstream demand. For the energy storage industry, this could lead to a price collapse in the short term and affect the installed capacity in the long term.

From a supply and demand perspective, coupled with multiple factors such as energy storage market policies, explosive growth in energy storage demand, and short-term supply gaps, lithium carbonate supply is likely to continue to show a "tight balance" trend. However, according to data from the Guangzhou Futures Exchange and public platforms, since November 2025, lithium carbonate futures have consistently been higher than the highest spot price, and their price movements have remained "coordinated." Generally speaking, it is normal for futures prices to be slightly higher than spot prices due to factors such as carrying costs, but the widening price gap should make the energy storage industry wary of "false prosperity" caused by price signals that may deviate from fundamentals.

In order to effectively cope with the threat of the continued rise in lithium carbonate prices, companies in the energy storage industry chain have recently joined the ranks of "lithium carbonate futures" traders.

According to incomplete statistics from Polaris Energy Storage Network, since November 2025, 16 listed companies have disclosed engaging in lithium carbonate futures hedging, with the highest contract value exceeding 100 billion yuan. These companies' business scope covers upstream materials, midstream batteries, and downstream energy storage integrators, including Trina Solar, TBEA, Canadian Solar, Penghui Energy, Farasis Energy, Tianli Lithium Energy, Rongjie Energy, Do-Fluoride Chemicals, Mengguli, Hainan Mining, Jiangte Motor, Nanhua Bioengineering, Tinci Materials, Tianji Energy, Wanrun New Energy, and Xinzhoubang. (Sorted by type of business involved, in no particular order).

Among them, Trina Solar, TBEA and Canadian Solar, three energy storage integrators, all stated that the purpose of carrying out futures hedging business is to reduce the many uncertainties and risks brought about by the fluctuation of raw material prices to the company's production and operation, avoid price risks, ensure timely delivery of products, control product costs, and ensure the sales profits of projects.

It is worth mentioning that Canadian Solar stated that the time frame from signing to delivery of energy storage business contracts ranges from 6 to 15 months, and the prices of all contracts are determined at the beginning of the period, which can lock in costs or profits in advance.

Lithium carbonate futures prices have risen by more than 166.6% in the past six months.

If the futures price exceeds the spot price by a significant margin beyond the normal carrying cost range, it may indicate irrational price fluctuations, often driven by speculative capital. According to public reports, by the end of 2025, speculative capital accounted for as much as 52% of the lithium carbonate futures market, surpassing industrial capital.

Industrial capital participation in hedging can help guide futures prices towards spot fundamentals, curbing irrational price fluctuations that deviate from supply and demand, and returning prices to fundamentals. The core logic is that upstream lithium mines and material suppliers, midstream battery manufacturers, and downstream energy storage companies in the lithium carbonate industry chain participate in futures not to "bet on price fluctuations," but to lock in production and operating costs or profits, mitigate price volatility risks, and their trading behavior is entirely anchored to spot supply and demand.

For the industry, industrial capital participation in hedging can curb irrational price fluctuations; for companies, it allows them to lock in raw material procurement costs in advance, mitigate the risk of rising spot prices, and offset the increase in spot procurement costs with profits from futures trading, thus achieving profitability. Penghui Energy disclosed that from May 16, 2025 to December 31, 2025, the cumulative amount of revenue recognized from commodity futures hedging business was approximately RMB 14.2337 million.

The persistent irrational fluctuations in lithium carbonate prices have severely impacted the sustainable development of the industry chain, prompting the Guangzhou Futures Exchange (GFE) to intensify its regulatory efforts. On January 12th, the GFE issued a self-regulatory notice, imposing a three-month restriction on six clients suspected of failing to declare their actual controlling relationships as required and exceeding trading limits in lithium carbonate futures contracts. Including the self-regulatory measures taken on December 26th, 2025, and January 8th, 2026, this brings the total number of cases investigated to three in less than a month.

On January 7th, the Ministry of Industry and Information Technology, the National Development and Reform Commission, the State Administration for Market Regulation, and the National Energy Administration jointly held a symposium on the power and energy storage battery industry, mentioning guiding enterprises to scientifically allocate production capacity and promoting the construction of a market order based on high quality and fair competition.

The price trend of lithium carbonate should be based on the real supply and demand relationship, and the prosperity of the energy storage industry should be based on rationality in order to ensure the industry's steady and long-term development.