Home / Business and Economy / China's Lithium Export Tax Hike Sparks Price Surge
China's Lithium Export Tax Hike Sparks Price Surge
12 Jan
Summary
- Lithium carbonate futures hit daily limit, surging 9% on Monday.
- China will entirely roll back VAT export rebates for battery products by 2027.
- Reduced rebates expected to boost near-term battery output and lithium demand.
On Monday, January 12, 2026, lithium prices in China experienced a significant surge, with futures contracts hitting their daily limit. The most-active lithium carbonate contract on the Guangzhou Futures Exchange rose by 9% to 156,060 yuan per metric ton, its highest point since November 2023.
This sharp increase is attributed to Beijing's recent announcement to cut and eventually eliminate value-added tax export rebates for battery products. While the full rollback is scheduled for January 1, 2027, a reduction to 6% from 9% takes effect in April. Investors are anticipating a rush in battery exports before the deadline.
The policy is projected to boost immediate battery production, thereby increasing demand for lithium. This development adds to the upward trend in lithium prices, which have already risen substantially since mid-2025, influenced by concerns over overcapacity and anticipated growth in energy storage systems.
