Jan 12 (Reuters) - Lithium prices soared in China on Monday after Beijing said it would roll back value-added tax export rebates, as investors bet the move would 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.
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 will be 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, 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 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.
Reporting by Lewis Jackson; additional reporting by Dylan Duan, Editing by Ronojoy Mazumdar
Source: Reuters