China to Scrap Battery Export Tax Rebates: Lithium Price Surges

Lithium prices soared on Monday after China announced it would cancel the value-added tax export rebate.

Investors are now betting the move will boost export demand in the early going.

Reuters said that the most active lithium carbonate contract on the Guangzhou Futures Exchange closed at the daily limit, soaring 9% to 156,060 yuan per ton, the highest level since November 2023.

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Investors and analysts expect exporters to speed up overseas shipments ahead of tax rebates.

China’s Ministry of Finance said on Friday that the export tax rebate for battery products will be reduced from 9% to 6% starting in April, and will be completely eliminated from January 1, 2027.

The policy is expected to boost battery production in the short term while underscoring Beijing’s long-term efforts to curb excessive inward competition. [excessive price-cutting]said an analyst at Chinese brokerage Orient Securities.

While the rebate applies to battery exports, not lithium carbonate itself, analysts say the rush to ship batteries ahead of the deadline will boost near-term battery production, boosting demand for lithium.

Lithium prices in China have been rising since mid-2025, surging 167% from last year’s lows, driven by Beijing’s pledge to crack down on manufacturing overcapacity.

The shutdown of battery giant CATL’s Jianxiawo mine and the prospect of strong demand for energy storage systems have also pushed up prices.

• Reuters Additional editing by Jim Pollard

See also:

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China aims to double battery storage, holds first solar auction

Global EV uncertainty sends shares of Korean battery companies down

Solar boom booming in Indonesia, Australia and Africa

China lays down laws for solar panel manufacturers: ending overproduction

Chinese solar companies lay off 87,000 workers, with more to come

Chinese polysilicon firms seek $7 billion to shut down one-third of solar industry

Solar overcapacity kills projects in China, fuels bankruptcies

Global energy transition spending falls well below demand

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd newspapers in Sydney, Perth, London and Melbourne before traveling to South East Asia in the late 1990s. He served as a senior editor at The Nation for more than 17 years.