Lithium stocks rocketed today after the world’s largest electric vehicle (EV) battery maker, China’s CATL, halted production at a major mine in Jiangxi province, taking a significant chunk of supply offline and recharging sentiment across the sector.
The Jiangxi operation, which produces about 9,000 tonnes a month of lithium carbonate equivalent (LCE), will be closed for three months. Chinese media reports suggest the suspension follows a lapsed mining permit, with other sites in the province also under scrutiny.
While analysts do not expect the shutdown alone to create an immediate supply deficit, the sudden removal of tonnes from the market has traders pricing in tighter conditions — and investors snapping up lithium equities.
Prices jump, equities follow
Lithium carbonate prices in China have climbed roughly 20% since early July. Spodumene concentrate, which bottomed in the low US$600-per-tonne range in June, is now near US$800 per tonne.
With sentiment already steadily improving, the news of the CATL shutdown has lit a fire under ASX lithium names on Monday:
- Liontown Resources (ASX:LTR) jumped as much as 22% intraday.
- Pilbara Minerals Ltd (ASX:PLS) surged nearly 20% to $2.30 as of 4:30 pm AEST.
- Mineral Resources Ltd (ASX:MIN) rose more than 11% to $37.95
- IGO Limited (ASX:IGO) also posted double-digit gains, easing to be up 8.6% at 4:30.
Liontown’s rally came alongside the completion of a $316 million equity raising to fund the ramp-up and transition to underground mining at Kathleen Valley. The placement includes $50 million from the National Reconstruction Fund and a proposed $50 million from China’s Canmax Technologies, subject to shareholder and regulatory approvals.
The sector rally helped push the S&P/ASX 200 to a record intraday high above 8,850 points, with the Global X Lithium & Battery Tech ETF up 2.42% as of 4:30.
From ‘lithium winter’ to a possible thaw
After a prolonged downturn driven by oversupply — particularly from China — lithium’s turnaround has been swift. The spot carbonate price dipped below CNY 60,000/t in June, its lowest in four years, before rebounding.
The flurry of lithium news is promising for ASX juniors positioning to take advantage of any price recovery, including Critical Resources Ltd (ASX:CRR), which is advancing its Mavis Lake lithium project in Canada alongside gold and antimony interests, and Lightning Minerals Ltd (ASX:L1M), which is ramping up exploration at its Lotus lithium project in WA’s Eastern Goldfields.
Meanwhile, European Lithium Ltd (ASX:EUR, OTCQB:EULIF) is working to bring its Wolfsberg project in Austria into production, aiming to feed Europe’s growing EV market, while Yandal Resources Ltd (ASX:YRL) has identified lithium potential in WA’s Yandal Belt alongside its gold exploration.
Whether today’s surge marks the start of a sustained bull run remains to be seen. But with Chinese supply under pressure and global demand growth still intact, the sector is enjoying something it has not seen in a while — a clear tailwind.