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(Bloomberg) -- Asian lithium producer stocks surged on speculation Chinese battery giant Contemporary Amperex Technology Co. halted production at a major mine in Jiangxi province, easing oversupply concerns for the material. Most Read from Bloomberg How Americans Voted Their Way Into a Housing Crisis Chicago Halts Hiring as Deficit Tops $1 Billion Through 2025 After a Record Hot Summer, Pressure Grows for A/C Mandates UC Berkeley Gives Transfer Students a Purpose-Built Home on Campus Rome May Start Charging Entry to the Trevi Fountain Pilbara Minerals Ltd.’s shares jumped as much as 17% in Sydney on Wednesday, while Tianqi Lithium Corp. climbed nearly 16% in Hong Kong. UBS Group AG, citing channel checks with contacts, said CATL decided to suspend its lithium lepidolite operation at the mine following a meeting on Tuesday.
Based on the recent lithium market conditions, CATL plans to make adjustment to the lithium carbonate production in Yichun, according to the company spokesperson. The stoppage will spur an 8% cut in China’s monthly lithium carbonate output and “will help rebalance the supply with demand,” UBS analysts led by Sky Han wrote in a note. The shutdown is positive for the commodity, according to UBS, which expects 11% to 23% upside for lithium prices in the rest of 2024. While the broker cautioned that past rumors about halted operations at the mine had turned out to be incorrect, it said it received “higher conviction this time.” Lithium shares have languished this year as a supply glut overwhelmed demand from battery manufacturers amid slower electric vehicle sales. Pilbara Minerals had closed at a two-year low on Tuesday.
In Australia, some lithium producers including Arcadium Lithium Plc and Core Lithium Ltd. were forced to shutter high cost sites. Mine developer Global Lithium Resources Ltd. announced on Tuesday it would immediately cut expenses at its own highly prospective project, citing a longer-than-expected slump in pricing. Lithium prices may enter an upcycle starting 2026, with aggregate supply showing signs of tightening as construction in several projects including Argentina’s Sal de Vida slow down and capital expenditure contracts, Guotai Junan Securities Co.
analysts wrote in a note. Lithium stocks typically start to rise six to nine months ahead of the commodity’s price, they added. --With assistance from April Ma, John Cheng, Danny Lee and Annie Lee. (Adds CATL statement in third paragraph.) Most Read from Bloomberg Businessweek EV Leases Go as Low as $20 a Month to Help Dealers Clear Their Lots The Covid Pandemic Left an Extra 13 Million Americans Single Putting Olive Oil in a Squeeze Bottle Earned This Startup a Cult Following Learning to Manage People by Talking to a Bot ‘They Have Stolen Our Business’: When You Leave Russia, Putin Sets the Terms ©2024 Bloomberg L.P. View comments
Asian Lithium Shares Soar as CATL Adjusts Output at Key Mine
September 11, 2024 08:05 PM AEST | By EODHD
