Chinese battery giant CATL has reportedly halted its lithium lepidolite operations in Jiangxi province, a significant lithium mining region in China. The decision is believed to be part of CATL’s strategy to ease the current oversupply of lithium carbonate equivalent (LCE) in the market.
UBS analyst Sky Han confirmed the development in a note released on September 11, 2024, stating that “CATL finally decided to suspend its lithium lepidolite operation in Jiangxi after a meeting on September 10.” Although there were previous speculations about CATL cutting lithium production in the region, Han expressed greater confidence in the accuracy of the recent reports.
News of CATL’s suspension sparked a surge in the stocks of Australian lithium miners. Pilbara Minerals Ltd. saw its shares rise by as much as 17%, a significant rebound after experiencing a 32% drop since the start of the year. Liontown Resources, another Australian lithium miner, also benefited from the announcement, with its stock price climbing 13%. Liontown began production this year and has secured several major lithium supply deals, including five-year agreements with Tesla and Ford, as well as a contract with LG Energy Solution to ensure compliance with the U.S. Inflation Reduction Act (IRA) battery material requirements.
CATL’s move to ease oversupply comes at a time when the global lithium market faces increased production, driving prices downward. The decision may help stabilize prices as demand for lithium, a critical component in electric vehicle batteries, continues to grow globally.
