Report Industry Investment Rating - Not provided in the given content Core Viewpoints - In March, the supply - demand situation of lithium carbonate marginally eased, but due to the low overall inventory - sales ratio, the need for upstream restocking, good downstream demand, and high enthusiasm for price - setting, there is support at the lower end. It is recommended to wait for the macro - environment to stabilize before buying [6]. - Strategies include: unilateral trading (buy when the macro - environment stabilizes), arbitrage (3 - 5 positive spread enters the delivery receipt stage), and options (protective strategy) [6]. Summary by Directory Chapter 1: Demand Analysis 1.1 New Energy Vehicles - **Domestic Market**: In January 2026, China's new energy vehicle production and sales reached 1.041 million and 0.945 million respectively, with year - on - year growth of 2.5% and 0.1%. New energy passenger vehicle production was 0.938 million, a year - on - year decrease of 0.6%, and the retail penetration rate was 38.6%. The cumulative production of power cells from January to February increased by 33% year - on - year, and it is expected to reach the January level in March. In January, factors such as the rush to export ternary batteries due to the decline in export tax rebates, the increase in battery capacity per vehicle, and the surge in heavy - truck sales due to subsidies were more beneficial to power batteries than vehicle sales [13]. - **Global Market**: In 2025, the cumulative sales of global new energy vehicles increased by 19% year - on - year to 20.542 million, compared with a 26% year - on - year increase in the same period last year. European new energy vehicle sales from January to December 2025 increased by 31% year - on - year to 3.887 million, compared with a 3% year - on - year decrease in the same period last year, and a 22% year - on - year increase in January 2026. US new energy vehicle sales from January to December 2025 decreased by 3% year - on - year to 1.495 million, compared with an 11% year - on - year increase in the same period last year, and a 25% year - on - year decrease in January 2026. China's new energy vehicle exports from January to December 2025 were 2.583 million, a year - on - year increase of 103%, compared with an 11% year - on - year increase in the same period last year, and a 101% year - on - year increase in January 2026 [20]. 1.2 Energy Storage Market - In January 2026, the newly commissioned new - type energy storage project installation scale in China was 3.78GW/10.90GWh, a year - on - year increase of 62%/106% and a month - on - month decrease of 84%/86%, with independent energy storage accounting for 90%. The new - type energy storage market started well. Policy support, such as the capacity tariff mechanism for grid - side independent new - type energy storage proposed in Document No. 114 of the National Development and Reform Commission in 2026, has promoted the development of the energy storage market. After the Spring Festival, the downstream demand for restocking was concentratedly released [25]. 1.3 Cell and Cathode Production Scheduling - SMM's January production data showed that battery production decreased by 6.2% month - on - month, with ternary batteries decreasing by 5.5% and lithium iron phosphate batteries decreasing by 5.6%. Power cell production decreased by 5.2% month - on - month, while energy storage cell production increased by 0.8% month - on - month. Ternary cathode material production decreased by 0.9% month - on - month, and lithium iron phosphate production decreased by 1.8% month - on - month. Electrolyte production decreased by 6.4% month - on - month. - SMM's February - March production scheduling data showed that battery production decreased by 11% in February and increased by 23% in March. Ternary cathode material production decreased by 15% in February and increased by 21% in March; lithium iron phosphate production decreased by 11% in February and increased by 15% in March. Electrolyte production decreased by 10% in February and increased by 22% in March. It is expected that each link will increase by 16 - 23% in March [33]. Chapter 2: Supply Analysis 2.1 Smelter Restart and Lithium Carbonate Production Recovery - From January to February, due to the maintenance of some smelters, production decreased month - on - month but still increased by 42% year - on - year. In March, with the restart of production and the ramping up of new production capacity, the monthly production is expected to exceed 100,000 tons, reaching a historical high. Although there was a situation of smelting losses due to the faster decline of lithium prices than ore prices, smelters did not reduce production due to losses because they had sufficient concentrate inventories before the Spring Festival. The production increased by more than 1,600 tons during the Spring Festival compared with before the festival, and increased by 768 tons week - on - week in the first week after the festival, indicating that smelters have restarted production [41]. 2.2 China's Monthly Lithium Carbonate Production by Raw Material - The supply of mica ore is insufficient, which affects the production of lithium carbonate from mica [42]. 2.3 Lithium Carbonate Supply Increase in March - In January - February, Chile's lithium salt exports were at a high level. Considering the delay in imports during the Spring Festival, they may arrive at Chinese ports in March - April, including a large amount of lithium sulfate as raw material for lithium carbonate. The supply of lithium carbonate increased significantly in March [49]. Chapter 3: Supply - Demand Balance and Inventory 3.1 Lithium Carbonate Supply - Demand Balance Estimation - Not elaborated in detail in the given text, only a graph of China's lithium carbonate supply - demand balance is presented [53]. 3.2 Dynamic Restocking Space in the Middle and Upstream of Lithium Carbonate - Since August 2025, there has been continuous destocking for 7 months, and the domestic inventory - sales ratio has dropped to the level of early 2022, with a tight fundamental situation supporting price increases. Inventory has shifted downstream, and there is still restocking space in the middle and upstream. The smelter inventory has dropped to the lowest level since SMM has data. Since March, the destocking speed has slowed down, with a 720 - ton decrease in inventory this week, and attention should be paid to the inflection point of inventory accumulation [60].