On August 20, 2025, domestic commodity futures main contracts showed mixed performance. Ethylene glycol (EG), caustic soda, and methanol rose over 1%. On the downside, lithium carbonate hit the daily limit down with an 8% decline; soda ash fell over 5%, glass dropped over 4%, while industrial silicon, coking coal, coke, and ferrosilicon declined over 2%.

The previous sharp rise in lithium carbonate was primarily driven by supply-side factors. In early July, Yichun city required eight lithium resource mining rights to complete resource reserve report updates by the end of September, while a certain mining area ceased production due to expired mining permits, triggering market expectations of tightened supply. Today's decline was also attributed to supply-side developments. Jiangte Motor announced that the previously halted Yichun Yinli operations will resume production in the near future, alleviating concerns over supply reduction and leading to notable market sentiment recovery.

From a fundamental perspective, the supply side faces considerable uncertainty with potential further production cuts from other mines and expectations of increased output from lithium salt plants resuming operations under high prices. On the demand side, while downstream production scheduling expectations improved significantly in August, terminal new energy passenger vehicle sales declined substantially month-over-month. Continued attention to lithium mining supply-side developments remains necessary.

Chart-wise, lithium carbonate main contract prices continue to fluctuate widely at high levels, with today's downward movement creating a new gap. Long positions should exercise caution regarding risks. Recent intensive news flow has led to volatile market sentiment, and expectations for continued high price volatility persist. Investors are advised to maintain prudent positioning.