Morning Insight: July 21, 2026

Morning Insight:July 21, 2026 LinlinGaoCertification：Z0002332gaolinlin@gtht.comYu Chen WuCertification：Z0024232wuyuchen@gtht.com Main Body Lithium Carbonate:Bearish long-term expectations continue to weigh onprices. Yesterday, lithium carbonate futures retreated sharply, with thebenchmark LC2609 contract closing at RMB 143,900/tonne, down 5.61%.In the short term, sentiment in the futures market has turnedincreasingly pessimistic alongside the decline in lithium miningequities. In particular, bearish expectations for the longer-term outlookhave encouraged investors to favor bull calendar spreadstrategies (longnearby contracts and short deferred contracts). On the policy front, China's Ministry of Finance and other authoritiesannounced last Friday adjustments to the battery consumption tax. A 2%consumption tax on lithium batteries will take effect on September 1,2026, rising to 4% from September 1, 2027. According to researchpublished by the Daton Times Think Tank, the new tax is expected to haveonly a limited impact on leading battery manufacturers, as the additionalcosts can largely be passed through to downstream customers. However, itis likely to squeeze the profit margins of second-and third-tier batteryproducers, creating a headwind for longer-term demand expectations.Despite the weaker sentiment, the spot market fundamentals remainrelatively constructive. The lithium carbonate market continues toexhibit a favorable supply-demand balance, with total social inventoriesdeclining steadily. Robust downstream production schedules, despite theseasonal demand lull, together with ongoing inventory destocking,continue to provide downside support for prices.Nevertheless, pessimism surrounding the medium-to long-term outlook— particularly the weakness in lithium mining equities—has capped upsidepotential. As a result, short-term price volatility is expected to remainelevated, and investors are advised to maintain a cautious stance. Keyfactors to monitor include the pace of domestic mine restarts, weeklyinventory trends, and sentiment in the lithium-related equity market. Container Freight Index (Europe Service):A wide trading range isexpected to dominate in the near term. The escalation of the U.S.–Iranconflict has lifted the price floor for global energy commodities. Forthe Europe route, the market is currently characterized by weak spotfundamentals but relatively neutral-to-slightly-optimistic valuations.On the fundamental side, seasonal cargo volumes are clearly entering adowntrend, with mid-August expected to be the key turning point, asprocurement by several large European retailers is likely to declinenoticeably. Current Week 31 freight rates are centered around USD4,900/FEU, equivalent to an SCFIS level of roughly 3,450 points. Freightrates are therefore expected to trend lower through the end of September.The EC2608 contract is currently trading within a neutral-to-moderatelyoptimistic valuation range, and is expected to fluctuate broadly between2,500 and 3,100 points. For the EC2609 and EC2610 contracts, rising low-sulfur fuel oil (LSFO)prices have increased operating costs and therefore provide somevaluation support. This cost-side support is offset by the weakeningfundamental outlook, creating a tug-of-war between higher costs andsofter freight demand. In the near term, deferred contracts are likely tofollow the direction of EC2608, although with lower price sensitivity.Further along the curve, the EC2612 and EC2701 contracts appear bettersuited for long positioning, as they offer exposure to healthier medium-term industry fundamentals and the expectation of stronger shippingcompany profitability during the peak season. Overall, the Europe route is still expected to trade within a broadrange. Investors should also monitor any temporary rebound in geopolitical risk premiums, which could provide opportunities toestablish short positions in the EC2610 contract at higher price levels. Open Interest Source：iFind, GUOTAIJUNAN FUTURESResearch Source：iFind, GUOTAIJUNAN FUTURESResearch Source：iFind, GUOTAIJUNAN FUTURESResearch News Highlights: 1. Several Chinese state-owned enterprises (SOEs) on Monday announcedmeasures including share buybacks, stake increases and dividend payoutsas they remain confident in the prospects of the country's capitalmarket. Chinalco, a world leading producer and supplier of aluminum products,announced that its controlling shareholder, Aluminum Corporation ofChina, and parties acting in concert, plan to increase their holdings ofthe company's A-shares and H-shares through the Shanghai and Hong Kongbourses, with the total amount of shareholding increase to reach no lessthan 1 billion yuan (about 147 million U.S. dollars) and no more than 2billion yuan within 12 months from the date of the announcement. China Coal Energy, one of the country's largest coal producers, said itscontrolling shareholder, China National Coal Group, plans to increase itsholdings of the company