Lithium carbonate futures in Guangzhou surged by the daily limit of 8% to US$11,279 per tonne after Contemporary Amperex Technology (CATL) suspended production at a major lithium mine in Yichun, Jiangxi province.
The world’s largest EV battery maker said its mining licence expired on Saturday and that it has applied to restart operations. CATL noted the halt would have only a limited impact on its business.
Analysts believe the move reflects Beijing’s push to rein in overcapacity in the EV battery sector. “It remains to be seen whether the government will take further steps to limit lithium output,” said Ding Haifeng of Shanghai-based Integrity.
A view of CATL’s lithium mine in Yichun, Jiangxi province.
Lithium price fluctuations directly affect EV production costs. Citigroup estimates that every 10,000 yuan per tonne rise in lithium prices could cut CATL’s 22.4% profit margin by about four percentage points.
