Morning Insight: May 15, 2026

Morning Insight:May 15, 2026 LinlinGaoCertification：Z0002332gaolinlin@gtht.comYu Chen Wu (Contact)Certification：F03133175 wuyuchen@gtht.com Main Body Lithium Carbonate:Elevated volatility intensifies. Yesterday, lithiumcarbonate futures opened sharply higher before reversing lower, with themain contract closing at RMB 191,760/tonne, down 4.99%. The market’strading focus has shifted from the earlier narrative of tight upstreamore supply toward concerns over downstream demand destruction, while highwarehouse warrant levels and weakness in equity markets also triggeredsignificant long liquidation and profit-taking. From the spot market perspective, according to SMM data, lithiumcarbonate production increased by 122 tonnes this week, while inventoriesdeclined by 1,255 tonnes. However, SMM estimates that total lithiumcarbonate inventories could decline by approximately 5,053 tonnes in May,suggesting the market remains in a destocking phase from a supply-demandbalance perspective. In reality, the core logic of tight upstream oresupply supporting prices has not fundamentally changed. However,following the previous sharp rally in futures prices, this bullishnarrativehas already been largely priced in by the market, with nomeaningful new marginal developments emerging. As a result, marketparticipants have begun to worry that persistently high prices couldsuppress downstream energy storage demand, pushing the marketinto aphase of heightened volatility. In the short term, cautious positioning is recommended. Key factors tomonitor going forward include the pace of domestic mine restarts,overseas lithium ore supply recovery, the economics of energy storageprojects,and downstream production scheduling trends. Open Interest Source：iFind, GUOTAIJUNAN FUTURESResearch Source：iFind, GUOTAIJUNAN FUTURESResearch Source：iFind, GUOTAIJUNAN FUTURESResearch Source：iFind, GUOTAIJUNAN FUTURESResearch News Highlights: 1. China's yuan-denominated loans rose 8.59 trillion yuan (about 1.26trillion U.S. dollars) in the first four months of 2026, central bankdata showed on Thursday. At the end of April, outstanding yuan loans stood at 280.5 trillion yuan,up 5.6 percent year on year, according to the People's Bank of China.The M2, a broad measure of money supply that covers cash in circulationand all deposits, had increased by 8.6 percent year on year to 353.04trillion yuan by the end of last month. The M1, which coverscash in circulation, demand deposits and clientreserves of non-bank payment institutions, reached 114.58 trillion yuanat the end of April, up 5 percent from the same period of last year.Thursday's data also revealed that the outstanding aggregate financing tothe real economy stood at 456.89 trillion yuan at the end of last month,growing 7.8 percent year on year. Aggregate financing to the real economy was 15.45 trillion yuan in theJanuary-April period, 893 billion yuan less than in the same period lastyear. Yuan deposits rose by 14 trillion yuan during the period, withoutstanding yuan deposits increasing 8.9 percent year on year to 342.68trillion yuan by the end of April, and outstanding foreign currency deposits rising 19.9 percent year on year. China will continue to apply an appropriately accommodative monetarypolicy in 2026, according to this year's government work report. (Source:Xinhua) 2. Several Chinese carriers, including Air China, China Southern Airlinesand Xiamen Airlines, have announced plans to increase fuel surcharges ondomestic routes for tickets sold starting from May 16. For routes of 800 kilometers and below, the fuel surcharge will be set at90 yuan (about 13.16 U.S. dollars) per flight segment, and 170 yuan persegment for routes exceeding 800 kilometers. For tickets on domestic routes sold on or before May 15, any changes madeafter May 16 will not be subject to the updated standards. Chinese airlines currently levy a fuel surcharge of 60 yuan on domesticroutes of 800 kilometers and below, and 120 yuan on routes exceeding 800kilometers. (Source: Xinhua) 3. The People's Bank of China, the country's central bank, announced onThursday that it will conduct a 300-billion-yuan (about 43.8 billion U.S.dollars) outright reverse repo operation on Friday to maintain ampleliquidity in the banking system. The operation will have a fixed quantity and be carried out throughinterest-rate bidding, with winning bids determined at multiple pricelevels. It will have a tenor of six months, or 184 days, according to thecentral bank. Outright reverse repo operations--a tool the central bank introduced inOctober 2024 to manage liquidity in the national banking system--areconducted each month with a tenor of no more than one year. These operations have enriched the country's monetary policy toolkit,complementing previous measures such as temporary repos, temporaryreverse repos, and the purchase and sale of treasury bonds. (Source:Xinhua) Guotai Junan Futures Co., Ltd. (hereinafter referred to as "the Com