"Lithium carbonate market sentiment cools down, with the main 2605 contract falling more than 6% in early trading."

In early trading today, the main lithium carbonate futures contract weakened to below 159,000 yuan/ton, with a decline of more than 6%. On the cost side, overseas lithium ore prices fluctuate with lithium carbonate prices, providing support for costs. On the supply side, the market is disrupted by the "Action Plan", with expectations that small and medium-sized mica mines in Jiangxi will be affected, delays in the resumption of production at the Jinxia lithium mine, and possible maintenance at lithium salt plants during the Spring Festival holiday, leading to expectations of a narrowing supply. In terms of imports, China imported 23,989 tons of lithium carbonate in December, an increase of 9% month-on-month but a decrease of 14% year-on-year. In the end industry, according to the predictions of China Passenger Car Association, the retail market scale of narrow passenger cars in January is estimated to be around 1.8 million vehicles, a decrease of 20.4% month-on-month but an increase of 0.3% year-on-year. The retail volume of new energy vehicles is expected to be around 800,000, with a penetration rate of about 44.4%. In January, the new energy vehicle industry enters the off-season, with expected decrease in demand, which may further lead to a decrease in demand for power batteries. With the rapid development of the energy storage industry, there is still demand for lithium carbonate. The exchange has issued risk control measures multiple times, and the market sentiment has cooled recently, leading to a price correction. Considering the continued disruption on the supply side and low inventory levels, the possibility of a significant price correction is unlikely. In terms of operations, it is advisable to consider buying on dips after the correction ends.