Chinese Lithium Futs Plunge As EU Hybrid Cap Deals Fresh Blow To Battery Demand

Lithium futures in China fell sharply on Monday after a Bloomberg report said the European Union will cap imports of Chinese hybrid vehicles at 350,000 per year under a “safeguard measure.” The quota could start as early as Dec. 1, limiting Chinese hybrid shipments to 350,000 in the first year, then increasing by 6% annually in subsequent years. The broader safeguard would also cover other suppliers to meet WTO requirements. The immediate impact was a 10% drop in the most-active lithium contract on the Guangzhou Futures Exchange to 104,740 yuan (15,649 dólares) per ton. The report notes EV and energy-storage demand has weakened, and earlier, tariff-related hybrid surges in Europe reached about 3,800 Chinese hybrids per month in October 2024. Analysts at Goldman expect markets to move from deficit to near-balance late in 2026 and into surplus later.