Lithium Shares Soar Following Production Halt at Chinese Mine

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Lithium stocks surged Monday on reports that battery maker Contemporary Amperex Technology, CATL, suspended production at a mine in China that plays a key role in supplying the global market. Shares of U.S. miner Albemarle, based in Charlotte, North Carolina, jumped 7% to close at $80.76, and the Sprott Lithium Miners ETF surged 14% as investors anticipated a rise in lithium prices due to falling supply.

CATL has halted production at the Yichun Project after the mine’s permit expired Saturday, according to statements made to CNBC. The company is actively working to renew the permit and will resume lithium production at the mine as soon as it receives approval.

The mine in question is responsible for approximately 4% of the projected global lithium supply for 2025, according to Morgan Stanley. The lithium supply and demand balance was already tightening, with a small surplus expected in 2025, according to the investment bank.

“Depending on the length of the Jianxiawo outage, and if there are any further disruptions elsewhere, the market is likely to move closer to balance in the remainder of the year, bringing upside risk to prices,” noted Amy Gower, a commodity strategist at Morgan Stanley, in a Monday report. Jianxiawo is the specific CATL mine within the larger Yichun Project in China’s Jiangxi province.

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