BUSINESS

Middle East Turmoil Sparks Three-Day Rout in Lithium Market

Published: Mar. 5, 2026 3:23 a.m. GMT+8

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Several commercial vessels are anchored off the coast of the United Arab Emirates after Iran announced the closure of the Strait of Hormuz on March 2. Photo: IC

Chinese lithium carbonate futures fell for a third straight session Wednesday amid mounting concerns that an escalating conflict in the Middle East could disrupt exports of energy-storage products to one of the industry’s fastest-growing markets.

The benchmark May 2026 lithium carbonate contract closed at 153,000 yuan ($22,148) a ton on Wednesday, down 3%. The contract, which hit its daily limit down Tuesday, has slid 14% over the past three days.

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Chinese lithium carbonate futures fell 14% over three days, closing at 153,000 yuan/ton, amid escalating Middle East tensions and supply chain risks.
The ongoing conflict and closure of the Strait of Hormuz have disrupted shipping, causing project delays and increased inventory for Chinese battery makers.
Middle East energy-storage demand in 2026 may drop by 15 GWh; January 2026 Chinese new-energy vehicle sales fell 18.9% year-on-year to 643,000 units.

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Who’s Who

Contemporary Amperex Technology Co. Ltd.: Contemporary Amperex Technology Co. Ltd. (CATL) is a Chinese battery maker that views the Middle East as a key market for its energy-storage products. Along with BYD, CATL secured a combined 42 GWh of energy-storage orders in the Middle East for 2025. The escalating conflict in the region and the closure of the Strait of Hormuz could disrupt their supply chains, affecting delivery times and costs.

BYD Co. Ltd.: BYD Co. Ltd. is a Chinese battery maker and a prominent player in the energy storage industry. The company secured approximately 42 GWh of energy-storage orders in the Middle East for 2025. The escalating conflict in the Middle East poses a threat to BYD's exports and could lead to increased shipping costs and delayed project implementations in the region.

MSC: MSC (地中海航运公司) is identified as a major container line that, along with others such as Maersk and Cosco Shipping, has suspended transits through the Strait of Hormuz. This action follows the closure of the strait by Iran's Islamic Revolutionary Guard Corps and has led to halting some shipments to the Middle East, impacting global supply chains.

Maersk: Maersk is one of the major container lines that has suspended transits through the Strait of Hormuz and halted some shipments to the Middle East. This action was taken after Iran's Islamic Revolutionary Guard Corps announced the closure of the strait, intensifying concerns about global supply chain disruptions.

Cosco Shipping: Cosco Shipping is a major container line that has suspended transits through the Strait of Hormuz. This action was taken due to heightened tensions in the Middle East following a joint U.S.-Israeli airstrike and Iran's subsequent actions, including the closure of the Strait. This suspension, along with those of other shipping companies, is contributing to concerns about disruptions to global supply chains.

Hapag-Lloyd: Hapag-Lloyd, a major container line, has suspended transits through the Strait of Hormuz and halted some shipments to the Middle East due to escalating tensions in the region. This action, taken in response to Iran's closure of the strait, contributes to increased uncertainty for shipping routes, potentially leading to rerouted vessels, detours, and risk surcharges, impacting delivery times and transportation costs.

ONE: Ocean Network Express (ONE) is a major container shipping line. Following the closure of the Strait of Hormuz due to heightened tensions in the Middle East, ONE has reportedly suspended transits through this vital waterway and halted some shipments to the region. This decision, shared by other major carriers, underscores concerns about supply chain disruptions and increased shipping costs.

Y&M Logistics Technology Co. Ltd.: Y&M Logistics Technology Co. Ltd. is a company whose head, Li Yihuan, commented on the impact of the Middle East conflict on shipping routes. Li stated that vessel rerouting, detours, and risk surcharges could affect delivery times and transportation costs.

Hithium: Hithium is a Chinese company that secured a combined 42 GWh of energy-storage orders in the Middle East for 2025, alongside other major Chinese battery makers like CATL and BYD. The company is facing potential disruptions to its Middle East operations due to escalating geopolitical tensions in the region, which could impact delivery times, transportation costs, and project execution.

Shenzhen Desay Battery Technology Co. Ltd.: Shenzhen Desay Battery Technology Co. Ltd. is a Chinese company that secured substantial energy-storage orders in the Middle East. Along with other major Chinese companies like CATL and BYD, it accounted for a combined 42 GWh of orders in the region for 2025. The ongoing conflict in the Middle East poses a threat to these shipments and installations.

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What Happened When

2025：: Saudi Arabia and the United Arab Emirates ranked as the third- and fifth-largest overseas markets for Chinese energy-storage products, with orders of roughly 20 GWh each.

2025：: Chinese companies, including CATL, BYD, Hithium, and Shenzhen Desay Battery, secured a combined 42 GWh of energy-storage orders in the Middle East.

January 2026：: Domestic sales of new-energy vehicles in China fell 18.9% year on year to 643,000 units.

February 28, 2026：: Tensions in the Middle East intensified rapidly, following a joint U.S.-Israeli airstrike that killed Iran’s Supreme Leader Ali Khamenei.

March 2, 2026：: Iran’s Islamic Revolutionary Guard Corps said it had closed the Strait of Hormuz.

After March 2, 2026：: Major container lines including MSC, Maersk, Cosco Shipping, Hapag-Lloyd, and Japan’s ONE suspended transits through the Strait of Hormuz and halted some shipments to the Middle East.

March 3, 2026：: The benchmark May 2026 lithium carbonate contract hit its daily limit down.

March 4, 2026：: Chinese lithium carbonate futures fell for a third straight session; the May 2026 contract closed at 153,000 yuan ($22,148) a ton, down 3%.

AI generated, for reference only