Report Summary 1. Report Industry Investment Rating There is no information about the industry investment rating in the report. 2. Core View On August 20, multiple contracts of lithium carbonate futures hit the daily limit down, mainly due to supply disruptions and sanctions. Short - term supply concerns may lead to extreme price movements, and relevant risks should be avoided. Upstream enterprises can conduct hedging, institutional investors should hold positions cautiously, and consider long - position layouts during price pullbacks. An 11 - 01/05 reverse spread strategy can be considered [3][5]. 3. Summary by Related Catalogs Latest Dynamics and Reasons On August 20, multiple contracts of lithium carbonate futures hit the limit down, with the main contract dropping to 8,080 yuan per ton. The decline was affected by two events: on August 19, Jiangte Motor announced the upcoming resumption of production of its subsidiary, Yichun Yinli, and the US DHS added lithium to the list of high - priority industries under the Uyghur Forced Labor Prevention Act, increasing concerns about the lithium supply chain [3]. Fundamental Situation There have been continuous disruptions on the supply side. Yichun Yinli's resumption of production after a one - month equipment maintenance is expected to have a limited actual impact on supply (about 1,000 tons per month), but a large impact on market sentiment. There are also concerns about mining compliance issues. In July, lithium ore imports were 75.07 million tons, a month - on - month decrease of 30.35%, with Australian exports at 273,000 tons, a month - on - month decrease of 67.24%. In July, domestic lithium carbonate imports were 14,000 tons, a month - on - month decrease of 21.8% and a year - on - year increase of 74.4%. From January to July, China imported 132,000 tons of lithium carbonate, a year - on - year increase of 0.8%. Currently, domestic supply and demand are generally balanced, but a supply - demand gap may emerge [4]. Summary and Strategy Short - term supply disruptions may cause extreme price movements. Upstream enterprises can conduct hedging, institutional investors should hold positions cautiously and consider long - position layouts during price pullbacks. For arbitrage, considering the long - term oversupply situation, a 11 - 01/05 reverse spread strategy can be considered [5].