Core Viewpoint - Lithium carbonate futures have dropped below 70,000 yuan/ton due to new regulations in the new energy sector and cost-price inversion, leading to continuous pressure on lithium prices [2][4][6]. Price Trends - On April 25, the main contract for lithium carbonate futures (LC2507) closed at 68,180 yuan/ton, having fallen below 70,000 yuan/ton on April 21, and has not recovered this level for four consecutive trading days, marking a year-to-date decline of over 12% [2][4]. - The price of lithium carbonate has decreased from a high of 78,000 yuan/ton at the beginning of the year to below 70,000 yuan/ton, while lithium spodumene prices have only slightly decreased from 845 USD/ton to 807 USD/ton, indicating a divergence in price trends [6][9]. Regulatory Impact - New regulations regarding electric vehicle batteries, which prohibit them from catching fire, have led to a cautious outlook on lithium demand, potentially reducing the amount of lithium used by automakers [4][9]. - The introduction of these regulations has already had a significant impact on futures prices, with only one day of positive closing in the 14 trading days from April 8 to April 25 [4]. Cost and Supply Dynamics - The cost-price inversion is a major factor in the decline of lithium prices, with the estimated production cost of lithium carbonate ranging from 70,000 to 71,000 yuan/ton, while the market price is only 69,600 yuan/ton [6]. - Inventory levels in the lithium carbonate industry have increased from 108,000 tons to 132,000 tons between March and April, indicating a supply surplus [6][9]. Market Sentiment and Future Outlook - The market sentiment is shifting from midstream to upstream, with the supply pressure at the mining level beginning to show as lithium mine prices have started to decline more rapidly [9]. - Despite some improvement in the financial performance of companies like Tianqi Lithium, which expects a profit of 82 million to 123 million yuan, the overall outlook remains challenging due to reduced demand growth and regulatory pressures [9].