Lithium futures fall 11.8% after EU-China auto export deal

what happened

Seeking Alpha reports that lithium carbonate futures in China fell sharply on Monday, sending Albemarle and other lithium stocks lower in pre-market trading. The most actively traded contract on the Guangzhou Futures Exchange reached its weakest level since December 17, 2025, before ending the session down 11.8% at 104,740 yuan per ton ($15,649). It was the contract’s steepest one-day decline since March.

Albemarle and SQM each fell 4.2% before the open, while Lithium Argentina declined 3.2%, Sigma Lithium dropped 1.9%, Atlas Lithium lost 1.7% and Lithium Aericas slipped 0.8%. Pressure intensified after China and the European Union reached an agreement that could reduce Chinese hybrid-car exports to the bloc by more than half. The European Trade Commission announced the agreement on Friday.

Lithium prices have been declining since reaching 209,880 yuan on May 13, a 33-month high. The market is concerned about demand from electric vehicles and large-scale energy storage systems. Goldman Sachs analysts said the supply-demand balance is turning more bearish, with Chinese and global markets expected to move from deficits to near balance in Q4 and then to surpluses over the next two years.

why it matters

The move weighs on lithium producers and signals that demand risks for battery materials are becoming more prominent in market pricing. Potentially lower Chinese hybrid-car exports to the EU add another source of pressure to the outlook.

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