Core Viewpoint - The recent strong rebound of lithium carbonate futures, following a significant correction, indicates a shift in market logic from macroeconomic sentiment to fundamental drivers [1] Group 1: Supply Dynamics - In January, lithium carbonate production saw a slight month-on-month decline, with February's supply contraction exceeding market expectations, as domestic production was reported at 88,300 tons, down 8.2% [2] - The supply contraction is characterized by both proactive maintenance and passive bottlenecks, with significant reductions in production from Sichuan and Jiangxi due to seasonal maintenance and environmental review delays [2] - The recovery progress of the Jiangxi Jianxiawo lithium mine is severely lagging, impacting supply flexibility for the first half of 2026, while Australian lithium projects are also not meeting recovery expectations [2] Group 2: Demand Trends - Despite the seasonal downturn, the demand for lithium remains robust, driven by improved export tax rebate policies for lithium batteries, leading to a notable "not-so-dull" demand characteristic [6] - February production of lithium iron phosphate is expected to be 383,200 tons, down 5.48% month-on-month, while ternary cathode materials are projected to decline by 14.05% to 73,300 tons, indicating varying demand across material segments [6] - Market expectations for future demand are optimistic, with significant developments in energy storage policies and a push for battery exports ahead of tax changes, which are expected to boost lithium carbonate consumption [10] Group 3: Inventory and Market Structure - Lithium carbonate social inventory continues to decline, reaching 105,000 tons, a 26% reduction from the July 2025 peak, with a notable shift in inventory structure indicating reduced pressure from production to consumption [11] - The current inventory levels show a significant decrease in stocks at smelters and traders, while downstream material manufacturers have increased their inventories due to pre-holiday stockpiling [11] Group 4: Market Outlook - In the short term, the balance sheet for February and March may shift from expected inventory reduction to slight accumulation due to concentrated shipments from Chile, with uncertain purchasing rhythms post-holiday [12] - Mid-term expectations suggest that downstream production may recover to high levels in March, with potential price increases in April and May, supported by low inventory levels and ongoing policy benefits [12][13] - The equilibrium in supply and demand is likely to remain intact until the Jiangxi mine resumes production, with continued upward pressure on lithium carbonate prices anticipated [13]

Report Summary - **Report Title**: PVC Weekly Report: Focus on the Sustainability of Export Rush, Trading in a Range - **Report Date**: February 8, 2026 - **Reporting Team**: Energy and Chemicals Team - **Analysts**: Guo Jianfeng, Guo Yanpeng, Li Qian 1. Report Industry Investment Rating No information provided. 2. Report's Core View - Short - term export rush and low valuation support the bottom of the PVC market, but attention should be paid to the post - holiday inventory accumulation. The domestic PVC supply is stable, domestic demand is in the seasonal off - peak, and exports are the key variable. Although the export rush supports the near - term price, there may be a marginal decline in the long - term, and the high - inventory pattern is hard to change. The cost side shows low valuation, and the market is expected to trade in a range [4]. 3. Summary by Relevant Catalogs 3.1 PVC Market Review - This week, PVC first rose and then fell, with the weekly line turning negative. It opened at 5040 at the beginning of the week, led the chemical sector's rise on Wednesday to a four - month high of 5178, then fell to a low of 4941 on Friday, and finally closed at 4981, with an amplitude of 237 points [3][8]. 3.2 Capital and Related Indicators - As of this Friday, the main contract's open interest was 1.1 million lots, at a high level for the same period. The V5 - 9 spread was - 113 yuan/ton as of this Friday, and on January 12, it once strengthened to - 40 yuan/ton due to export tariff news. Considering the short - term export demand front - loading effect, a long - short spread trade between May and September contracts can be considered [11][17]. 3.3 Valuation - As of this Thursday, the integrated profit of Shandong chlor - alkali was - 937 yuan/ton, still at a low level for the same period, and that of Northwest China was 926 yuan/ton, at a relatively low - to - neutral level for the same period. Shandong's industrial and commercial electricity price was 0.63 yuan/kWh (month - on - month decrease of 0.02), falling for three consecutive months; Inner Mongolia Western's industrial and commercial electricity price was 0.45 yuan/ton (month - on - month increase of 0.01), rising for two consecutive months [20][22]. 3.4 Supply - This week, PVC output was 480,000 tons (month - on - month increase of 0.2), with a cumulative year - on - year increase of 2.8%, remaining stable for seven consecutive weeks, and the capacity utilization rate was 79%. Only Formosa Plastics (82) in Taiwan and Tosoh (22) in Guangzhou have new planned maintenance in February [26]. 3.5 Domestic Demand - In 2025, the cumulative year - on - year growth rates of new construction, construction in progress, completion, and sales areas of real estate were - 20.4%, - 10.0%, - 18.1%, and - 8.7% respectively. The sales area has seen an expanding decline for eight consecutive months. The real estate transaction area is at a low level for the same period. In December 2025, the year - on - year growth rates of the price indices of newly built and second - hand residential buildings in 70 large and medium - sized cities were - 3.05% and 6.07% respectively, and the month - on - month growth rates were - 0.37% and - 0.70% respectively [31][34]. 3.6 External Demand - This week, the FOB price of Chinese calcium carbide, CFR price to India, and Southeast Asian price in January increased by $20, $20, and $0 per ton respectively. The Asian market price continued to rise, and the March contract price is expected to increase by $20 - 40 per ton. The Indian market price is rising, but demand is still insufficient. The US PVC market price is expected to rise further. In 2025, PVC exports were 3.82 million tons (year - on - year increase of 1.21 million tons, cumulative year - on - year increase of 46%). In January 2026, the average monthly export order volume was 62,000 tons (compared to 35,000 tons last year), and exports are expected to maintain high growth in the first quarter [37][42]. 3.7 Inventory - As of this Thursday, PVC enterprise inventory was 290,000 tons, decreasing for four consecutive weeks. The small - sample social inventory of PVC was 590,000 tons, the large - sample social inventory was 1.23 million tons, and the upper - middle - stream inventory was 1.52 million tons (week - on - week increase of 18,000 tons, year - on - year increase of 260,000 tons), rising for six consecutive weeks. It is expected that the social inventory will reach 1.38 million tons by the end of February [45][47]. 3.8 Caustic Soda Situation - This week, caustic soda output was 864,000 tons (month - on - month increase of 0.1), with a cumulative year - on - year increase of 5.6%, and the capacity utilization rate was 88%, at a high level for the same period. In 2025, caustic soda exports were 4.1 million tons (cumulative year - on - year increase of 34%). The current caustic soda factory inventory is 470,000 tons, with a month - on - month decrease of 49,000 tons, showing a high - level decline [58][60][63]. 3.9 Strategies - **Single - side trading**: Treat it as range - bound trading. Focus on the V2605 contract in the range of 4850 - 5100 yuan/ton. - **Hedging**: Since the futures market is in a contango structure, industrial customers can sell on rallies. - **Arbitrage**: The export rush supports the near - term price. Consider a long - short spread trade between the May and September contracts [5].

1. Report Industry Investment Rating - The report does not provide an industry investment rating [1][2][3][4] 2. Core Viewpoints of the Report - In the short - term, PVC's trend is strong due to factors like export rush, the Minamata Convention, stock funds, and future production cut expectations. However, the PVC market has a high - output and high - inventory structure that is difficult to change. Before the 03 contract, the futures contracts face a pattern of high operation and weak demand. The expected significant inventory build - up during the Spring Festival and the contango structure limit the market's trading space for low - valuation factors, and the rapid recovery of the disk profit is not conducive to future production cuts and maintenance in the chlor - alkali industry. Also, PVC warehouse receipts are at a high level, and there is still significant pressure on long - position holders to take delivery. Overall, in 2026, the production cut in the maintenance peak season on the supply side may exceed expectations, which is beneficial for the profit repair of the chlor - alkali industry. Before the Spring Festival, the optimistic expectations are difficult to disprove, and the disk continuously raises the valuation. But if manufacturers do not cut production later, the market will still trade on delivery pressure and excessive forward premium [3] 3. Summary by Relevant Catalogs 3.1 Fundamental Tracking - The 05 - contract futures price is 5063, the East China spot price is 4780, the basis is - 283, and the 5 - 9 spread is - 122. The domestic PVC spot market fundamentals remain dull. Industry supply is slowly increasing, but demand is gradually slowing due to the festival, and the inventory continues to accumulate. The disk was significantly pushed up in the afternoon due to carbon - emission - related remarks, but the spot market transactions were light, and the increase in spot prices was lower than that of the disk [2] 3.2 Market Condition Analysis - Short - term factors support the strong PVC trend, but the high - output and high - inventory structure persists. Before the 03 contract, there is a high - operation and weak - demand pattern. The expected inventory build - up during the Spring Festival and the contango structure limit trading space, and the rapid profit recovery is not conducive to production cuts. PVC warehouse receipts are high, and there is delivery pressure. In 2026, supply - side production cuts in the maintenance peak season may exceed expectations, and before the Spring Festival, optimistic expectations are hard to disprove, but if there are no production cuts later, the market will focus on delivery pressure and forward premium [3] 3.3 Trend Intensity - The PVC trend intensity is 0, with the value range of [- 2, 2], where - 2 means most bearish and 2 means most bullish [4]

Group 1 - The domestic futures market showed a significant increase on January 26, with the European shipping index futures main contract opening at 1150.0 points and reaching a high of 1225.0 points, marking a rise of 5.63% [1] - The European shipping index is currently experiencing a strong upward trend, with expectations of increased cargo pressure as the Spring Festival approaches, leading to a potential decline in freight rates during the pre-holiday period [2] - The market is observing a divergence between spot price declines and future contract expectations, influenced by macroeconomic data and uncertainties related to trade protectionism [2] Group 2 - Current market conditions are in a downward phase for spot prices, with the April contract price nearing the previous off-season contract level, while the June contract valuation has risen to approximately $2000/FEU, exceeding this year's long-term contract price average [3] - The overall market is expected to shift towards a weak and volatile trend due to the lack of new positive drivers, with future contract performance largely dependent on the realization of demand-side "rush shipments" post-Spring Festival [3] - The performance of long-term contracts will primarily hinge on developments in the Middle East and the actual progress of shipping routes in the Red Sea [3]

Core Viewpoint - The lithium carbonate futures prices have experienced a strong upward trend since the beginning of 2026, driven by improved supply-demand dynamics and policy adjustments, particularly in response to the upcoming phased reduction of export tax rebates for battery products [1][3]. Price Trends - Lithium carbonate futures contract 2605 has seen significant price increases, breaking through key thresholds of 150,000 CNY/ton, 160,000 CNY/ton, and 170,000 CNY/ton, with a closing price of 156,100 CNY/ton on January 12, 2026, and 166,900 CNY/ton on January 13, 2026, marking a cumulative increase of 37.25% since the end of 2025 [1][2]. - The spot market also reflects strong performance, with battery-grade lithium carbonate prices reaching 153,400 CNY/ton and 163,900 CNY/ton on January 12 and 13, 2026, respectively, indicating increases of 9.89% and 6.81% [2]. Supply and Demand Dynamics - The rebound in lithium prices since the second half of 2025 is attributed to increased downstream demand and improved supply-demand relationships, with supply disruptions and rapid demand release being key factors [3]. - The adjustment of export tax rebates for battery products is expected to accelerate the "rush to export" behavior among battery manufacturers, leading to a concentrated release of short-term demand for lithium carbonate [3][4]. Industry Response - The lithium battery supply chain has begun to proactively adjust to the anticipated changes in export tax policy, with downstream battery manufacturers accelerating production schedules and requiring prompt supply from cathode material producers [4]. - The production capacity utilization rate is expected to remain high in the first quarter of 2026 due to the "rush to export" phenomenon, contrasting with typical seasonal declines [4]. Strategic Adjustments - Some cathode material producers are negotiating pricing mechanisms with downstream clients to mitigate cost pressures, with strategies including direct supply of lithium carbonate by clients and linking settlement prices to futures prices [6][7]. - The anticipated tightening of lithium carbonate inventory due to proactive replenishment by downstream industries is expected to support prices in the short term [7]. Long-term Outlook - The gradual reduction of export tax rebates is projected to indirectly increase the overall export costs of battery cells, potentially leading to an earlier release of some overseas demand into 2026 [6][7]. - The industry is expected to shift from price competition to value competition, emphasizing technological upgrades and product performance improvements to enhance core competitiveness [7].

Report Summary Industry Investment Rating No information provided Core Viewpoints - Lithium prices are on a significant upward trend driven by tax policy adjustments, with short - term demand boosted by "rush - to - export" expectations, but there are potential callback risks [1] - For on - exchange options, consider using strategies like buying in - the - money call options or bull call spread combinations to reduce costs [2] - For off - exchange options, clients with long positions planning to gradually reduce their holdings can consider the Phoenix Knock - Out Put Option to seize high - selling opportunities [3] Summary by Related Content Lithium Market - The lithium carbonate futures market is strong, with the main 2605 contract reaching 170,200 yuan/ton at mid - day, up 9.51% [1] - From April 1, 2026, to December 31, 2026, the VAT export rebate rate for battery products will drop from 9% to 6% and will be fully canceled on January 1, 2027 [1] - In the past two months, the cost of various types of battery cells has generally increased by 15% - 20% [1] - From January to November 2025, China's cumulative exports of power and other batteries reached 260.3GWh, accounting for 18.4% of total sales [1] On - exchange Options - Due to the limited strike price of call options and high volatility premium, consider using strategies such as buying in - the - money call options or bull call spread combinations [2] Off - exchange Options - Clients with long positions planning to gradually reduce their holdings can consider the Phoenix Knock - Out Put Option to seize high - selling opportunities and gain additional income during wide - range market oscillations [3]

Report Summary Report Industry Investment Rating No specific industry investment rating is provided in the reports. Core Viewpoints - The lithium price continues to rise significantly, driven by the adjustment of tax policies. The expected "rush to export" during the policy transition period boosts demand in the traditional off - season, and the lithium price is still in an upward channel, but there is a risk of callback if the price increase is passed on to downstream [1]. - For the on - site options, considering the limited strike price of call options and high volatility premium, one can use buying in - the - money call options for long - hedging or bull call spread combinations to protect part of the upside space and reduce costs [2]. - For off - site options, customers with long positions planning to gradually reduce their positions can consider arranging Phoenix Knock - out Put Options with a moderate cycle and a wide range to seize the opportunity to reduce positions at high prices and gain additional income in a wide - range volatile market [3]. Summary by Related Content Lithium Market - The lithium carbonate futures market performs strongly. As of the mid - day close on January 13, 2026, the main 2605 contract is reported at 170,200 yuan/ton, up 9.51%. The rise is mainly driven by the adjustment of the battery product's VAT export refund rate from 9% to 6 from April 1 to December 31, 2026, and the planned full cancellation on January 1, 2027 [1]. - In the context of rising raw material prices, the cost of various types of battery cells has generally increased by 15% - 20% in the past two months. The "rush to export" behavior is expected to boost demand in the traditional off - season, and the lithium price is in an upward channel, with the short - term high affected by long - profit - taking [1]. - If the price increase in the industrial chain is successfully passed on to the downstream, it may suppress terminal demand and bring a callback risk [1]. On - site Options Given the limited strike price of call options and high volatility premium, one can use buying in - the - money call options for long - hedging or bull call spread combinations to protect part of the upside space and reduce costs [2]. Off - site Options Customers with long positions planning to gradually reduce their positions can consider arranging Phoenix Knock - out Put Options with a moderate cycle and a wide range to seize the opportunity to reduce positions at high prices and gain additional income in a wide - range volatile market [3].

Core Viewpoint - The recent surge in lithium carbonate futures prices is primarily driven by the adjustment of export tax rebate policies, leading to expectations of increased exports and a tight supply chain, despite potential volatility risks in the market [4][11][12]. Supply Side - As of January 12, total lithium carbonate production increased by 115 tons to 22,535 tons, a 0.5% week-on-week rise. The production of lithium carbonate from spodumene reached 3,959 tons, while lithium carbonate from lepidolite and salt lake sources were 2,956 tons and 3,185 tons, respectively, showing increases of 0.7% and 1.3% [5]. Demand Side - There is significant divergence in market expectations for January production. A neutral outlook suggests a demand decrease of around 5%, while ongoing negotiations in the industry could lead to a potential 10% drop. However, long-term demand from energy storage and heavy-duty vehicles remains strong, with expectations of increased orders [7][10]. Inventory Status - As of January 12, weekly inventory stood at 109,942 tons, with smelter inventory at 18,382 tons and downstream inventory at 36,540 tons, reflecting a decrease of 2,458 tons. The total warehouse receipts as of January 9 reached 25,360 contracts, an increase of 5,079 contracts week-on-week [7][9]. Cost Side - The average cost of lithium carbonate is reported at 152,955.2 yuan/ton, with a production loss of 12,705.2 yuan/ton. The production costs for spodumene and lepidolite are 153,000 yuan/ton and 142,000 yuan/ton, respectively, indicating limited profit margins [9]. Market Perspectives - The adjustment of export tax rebates has led to a surge in export demand, with expectations of concentrated "export rush" behavior in the short term. The rising raw material prices are squeezing profit margins for battery manufacturers, which may lead to increased purchasing activity if prices correct [11][12][14]. - The market sentiment is optimistic due to multiple factors including supply disruptions, improving demand, and policy catalysts. However, caution is advised as the rapid price increases may lead to profit-taking and subsequent volatility [12][13].

Core Viewpoint - The recent surge in lithium carbonate futures prices is attributed to strong fundamental expectations and multiple positive market news, with the main contract LC2605 rising by 9% to 156,300 yuan/ton [1][2]. Market Dynamics - The adjustment of export tax rebate policies for battery products, effective from April 1, 2026, is expected to create a short-term "export rush," supporting demand and alleviating concerns about seasonal demand weakness [2]. - The cumulative export volume of power and other batteries from January to November 2025 reached 260.3 GWh, a year-on-year increase of 44.2%, indicating that the anticipated "export rush" will have a marginal positive impact on overall lithium carbonate demand [2]. Policy Impact - The reduction and eventual cancellation of the export tax rebate for lithium batteries is seen as a move to guide the industry away from pure scale expansion and to alleviate homogenization competition pressures [4]. - The policy aims to encourage companies to enhance product technology and value, promoting a healthier and more sustainable industry structure [4]. Supply and Demand Outlook - Current market conditions suggest a gradual accumulation of lithium carbonate inventory, with signs of weakening fundamentals as of early January 2026 [4]. - The market is characterized by strong supply and demand dynamics, with ongoing negotiations between upstream and downstream players affecting price volatility [4]. Future Projections - There is an expectation of continued "export rush" demand from battery manufacturers until the cancellation of the tax rebate in 2027, potentially leading to concentrated short-term demand for lithium carbonate [5]. - However, a significant decline in demand for new energy batteries is anticipated at the beginning of 2026, necessitating production adjustments by battery manufacturers [5]. - The market may face dual impacts from upstream maintenance and traditional seasonal demand downturns, suggesting potential volatility in supply and demand [5].

Core Viewpoint - The recent surge in lithium carbonate futures prices is attributed to strong fundamental expectations and multiple positive market news, particularly the adjustment of export tax policies for battery products in China [2][3]. Group 1: Price Movement - On January 12, lithium carbonate futures opened with a limit increase, with the main contract LC2605 rising by 9% to 156,300 yuan/ton [1]. - The price increase reflects a strong performance compared to the non-ferrous sector, influenced by seasonal demand expectations and supply-side news [3]. Group 2: Export Tax Policy Impact - The Ministry of Finance and the State Taxation Administration announced a reduction in the VAT export rebate rate for battery products from 9% to 6% starting April 1, 2026, and the complete cancellation of the rebate from January 1, 2027 [2]. - Analysts suggest that this policy may lead to a short-term "export rush," supporting demand and mitigating concerns about seasonal demand weakness [2][4]. - The adjustment aims to guide the battery industry away from a purely scale expansion model and alleviate homogenization competition pressures [4]. Group 3: Supply and Demand Dynamics - Data from the China Automotive Power Battery Industry Innovation Alliance indicates that from January to November 2025, the cumulative export volume of power and other batteries reached 260.3 GWh, a year-on-year increase of 44.2% [2]. - Despite the potential for increased export demand, the overall impact on lithium carbonate supply and demand is expected to be limited, with a gradual accumulation of inventory observed [4][5]. - The market is currently in a phase of strong supply and demand dynamics, with ongoing competition between upstream and downstream players [4]. Group 4: Future Outlook - Analysts predict that the demand for lithium carbonate will remain strong until the cancellation of the export rebate in 2027, with potential for concentrated release of export demand [4]. - However, there are warnings about a significant decline in new energy battery demand at the beginning of 2026, which may lead to production adjustments by battery manufacturers [5]. - The market should closely monitor the actual progress of battery exports in the first quarter and the potential discrepancies between expectations and reality [5].