Global Business, BICHEM Group
On August 11, China’s lithium carbonate futures surged 8%, reaching 81,000 yuan/ton—the highest level in six months. The immediate trigger was the suspension of mining at CATL’s Jianxiawo mica mine in Jiangxi, whose license expired on August 9. The mine accounts for roughly 20% of China’s mica-based lithium output. The halt is expected to create a short-term supply gap of several thousand tons. Regulatory tightening across the region has intensified, reinforcing expectations of stricter industry compliance.
Global market reaction
The disruption quickly rippled across domestic and international markets. Chinese lithium futures hit daily trading limits, while leading A-share lithium companies, including Tianqi Lithium, surged. Overseas, Ganfeng Lithium’s Hong Kong shares jumped 18%, and Australia’s Liontown Resources rose 25%, reflecting both supply concerns and short-covering dynamics. With China consuming 60% of global lithium in 2024, domestic supply fluctuations directly influence global pricing.
Short-term tightness vs. long-term supply
The supply shortfall coincides with peak EV battery demand in Q3, prompting traders to stockpile. Spot prices for battery-grade lithium in Shanghai have climbed 12% in two weeks to 71,900 yuan/ton. However, long-term fundamentals remain balanced: global lithium production capacity in 2025 is projected to exceed 2 million tons LCE, and domestic inventories provide a buffer. Analysts emphasize that the rally is largely "seasonal and sentiment-driven".
Cross-industry impacts
The surge also lifted polysilicon, industrial silicon, and certain coal products, driven by capital rotation within the renewable energy sector and expectations of stricter resource regulation. However, these effects are likely temporary, as underlying supply-demand gaps remain.
Looking ahead
Key variables include the timeline for license renewals, alternative supply from South American brine producers, and rising environmental compliance costs, which could shift competition from price-based to quality-driven. Investors should weigh the short-term upside against risks such as rapid price corrections and sectoral divergence. Companies with diversified and international operations are better positioned to navigate volatility.