With EV sales slowing down and green energy projects facing delays, lithium prices have taken a huge hit — falling over 87% from their Nov. 2022 pandemic highs. But there may be some relief for struggling mining companies. According to a report by Citi, the world’s largest battery maker, Contemporary Amperex Technology (CATL), has halted production at one of its major mines — and more changes are expected to follow, potentially charging up lithium prices and benefiting businesses.
- UBS analysts said that this production halt would “spur an 8% cut in China’s monthly lithium” output, with prices possibly rising 11% to 23% from current levels.
- Separately, Citi analysts note that while the changes are unlikely to have a “big near-term impact,” additional production cuts could be on the way — as CATL may shutter operations at two more lithium production lines.
Lithium austerity: Following the report, shares of global lithium miners jumped, with the iShares Lithium Miners and Producers ETF rallying 11% on Wednesday. In the US, Albemarle Corporation saw an 13% increase, while ailing Lithium Americas gained 12%. However, investors have reason to remain cautious — as CATL has not officially confirmed the suspensions. Regardless, any price impacts are likely to ripple through to EV producers and battery giants — both of which are facing their own economic struggles.
