Lithium prices and stocks spiked after China’s CATL halted operations at a major lithium mine, raising fears of broader supply cuts. The shutdown, part of a government push to curb overcapacity, sent global lithium producers’ shares soaring and futures prices to daily limits. While CATL says the impact is minimal, markets are bracing for further disruptions that could drive prices even higher. They write:
Lithium prices and stocks spiked on Monday after battery giant Contemporary Amperex Technology Co. Ltd. halted operations at a major mine in China, spurring speculation that Beijing might move to suspend other projects as it tackles overcapacity across the economy.
Tianqi Lithium Corp. jumped as much as 19% in Hong Kong, while Ganfeng Lithium Group Co. surged 21% after CATL confirmed it had shut the mine in Jiangxi province. Australian and American miners also rallied. Prices of the battery metal on the Guangzhou Futures Exchange hit the daily limit and held firm throughout the day.
Shares of US producer Albemarle Corp. surged above 15% at 9:33 a.m. in New York, while Piedmont Lithium Inc. jumped by nearly 18%. Lithium Americas Corp. climbed as much as 13% while Chilean producer SQM rose as much as 12% in US trading. […]
“CATL’s situation does not change the oversupply structure in the market,” said Zhang Weixin, an analyst at China Futures Co. “However, if production disruption is expanded to other mines in Yichun after Sept. 30, the lithium price level could go even higher.”
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