Lithium and uranium markets are entering a sensitive phase as prices retreat from recent highs, forcing investors to reassess whether the latest pullbacks represent healthy consolidations or early warning signs of deeper corrections.
Both commodities remain structurally important to the global energy transition, yet short-term price action is being shaped by policy shifts, seasonal factors, and broader macro pressure across commodities.
Lithium Prices Cool After Sharp Rally
Lithium prices dropped on February 5, 2026, with spot benchmarks falling to around 144,000 yuan per ton (approximately $20,736 per ton), marking a 5.88% daily decline. Despite the setback, lithium remains firmly higher on a broader timeframe, up nearly 13% over the past month and more than 86% year over year, based on CFD-linked benchmark data.
Lithium dropped over 5% on February 5, 2026, after gaining 12.94% over the past month and rising 86.29% year-over-year. Source: TradingEconomics
The recent drop follows a strong rally that pushed lithium carbonate futures to a more than two-year high near 180,000 yuan per ton ($25,920) in late January. Since then, prices have drifted lower as markets reassessed the pace of incremental demand tied to large-scale energy storage and electric vehicle deployment.
Lithium-ion battery pack prices have fallen from $1,474/kWh in 2010 to $108/kWh in 2025, dropping about 8% annually, highlighting accelerating electrification in the energy and transport sectors. Source: Kirill Klip via X
China’s SMM battery-grade lithium index also reflected the pullback, sliding 5.4% to 141,706 yuan per ton ($20,405) in a single session. Futures briefly hit their daily downside limit before stabilizing, highlighting elevated volatility rather than outright capitulation. SMM noted that spot sellers remained cautious, while buyers selectively stepped in at lower levels, signaling tentative accumulation near the $20,000 threshold.
Policy Signals and Supply Adjustments Shape Outlook
China continues to play an outsized role in shaping lithium pricing dynamics. Authorities recently announced plans to reduce export rebates for battery producers starting in April, prompting manufacturers to bring forward raw material purchases. At the same time, Beijing reiterated aggressive investment plans in power generation, data centers, and grid-scale energy storage.
China’s Qinghai Province launched the world’s first 20,000-tonne lithium production line using patented technology, boosting overall recovery rates from 75.38% to 90.41%. Source: China Science via X
Demand expectations were further reinforced after officials confirmed plans to double EV charging capacity to 180 gigawatts by 2027, strengthening the long-term case for lithium-intensive battery systems. On the supply side, regulators revoked 27 mining permits in Jiangxi, one of China’s core lithium hubs, following earlier production suspensions at CATL’s Jianxiawo mine as part of a broader anti-overcapacity campaign.
Industry observers note that the recent rally has already altered production incentives. As analyst Andy Leyland observed, lithium prices have shifted “from incentivising almost no new producers to incentivising almost all of them” within just two months, reflecting a rapid change in market signals after prices rebounded from mid-2025 lows near 58,000 yuan per ton.
Lithium and the Global Energy Transition
Lithium’s price behavior cannot be separated from its structural role in electrification. Energy storage demand is expected to expand sharply in 2026, supported by electric vehicles, grid upgrades, and data-center power needs. According to UBS, global lithium demand could grow 14% in 2026 and 16% in 2027, prompting the bank to raise its long-term lithium price forecasts by 74%.
UBS analyst Lachlan Shaw noted that electric vehicles are approaching “triple parity” in cost, range, and charging time, a shift that could accelerate adoption later this decade. However, analysts also caution that sustained high prices risk encouraging alternative chemistries and cost overruns if new supply comes online too aggressively.
Uranium Pulls Back, But Term Market Holds Firm
Uranium prices have followed a similar pattern of short-term weakness within a longer-term uptrend. Spot uranium slipped to $87.55 per pound on February 4, down 4.63% on the day, though still up nearly 24% year over year. Trading Economics models project uranium prices near $100 per pound by the end of the quarter, with further gains toward $105 over the next 12 months.
Uranium declined 4.63% to $87.55/Lb on February 4, 2026, after gaining 6.77% over the past month and rising 24.45% year-over-year. Source: TradingEconomics
Market participants stress that spot volatility may be overstated. As market commentator Lukas Ekwueme noted, spot trading accounts for only 15–20% of annual uranium volumes, with utilities primarily sourcing fuel through long-term contracts that often carry price floors around $85–$90 per pound.
Uranium spot prices fall sharply, but term contracts—used by utilities at $90+/Lb—remain key, supporting long-term price growth. Source: Lukas Ekwueme via X
The Uzbek Atomic Energy Agency reported higher-than-expected uranium production last year, yet prices remain elevated as global nuclear capacity expands to meet electrification and data-center demand. In the U.S., regulatory easing and $2.7 billion in new contracts for fuel conversion and enrichment aim to offset reduced reliance on Russian supply.
Buy-the-Dip or Breakdown Risk?
For both lithium and uranium, the question now centers on whether recent pullbacks represent consolidation above key support levels or the start of a broader repricing. Lithium’s ability to hold near $20,000 per ton will be closely watched, particularly as China approaches its Lunar New Year slowdown on February 17, when industrial activity typically softens.
In uranium markets, attention remains on the divergence between spot weakness and resilient term pricing. As broader commodity markets face pressure from a stronger U.S. dollar and softer risk appetite, analysts emphasize that long-term fundamentals—rather than short-term volatility—are likely to drive investment decisions in both metals over the coming quarters.