Global lithium prices jump as world’s largest EV battery maker halts operations at key supply hub
Lithium producers rallied on Monday after Contemporary Amperex Technology Co. (CATL), the world’s largest electric vehicle battery manufacturer, announced the temporary closure of its Jianxiawo lithium mine in China’s Yichun hub. The three-month shutdown, prompted by the expiration of the mine’s operating permit, is expected to tighten global supply and push prices higher.
The Jianxiawo mine is one of the largest lithium sources in the world and a critical asset for CATL, which commands more than one-third of the global EV battery market. The closure immediately sent lithium spot prices up nearly 4% on Monday, extending a 15% rally over the past month.
Shares of leading lithium producers surged on the news. Albemarle (ALB) climbed over 11%, while Chile’s Sociedad Química y Minera (SQM) advanced 9%. Lithium Americas (LAC) and Sigma Lithium (SGML) gained 8% and 16%, respectively. Tesla (TSLA), one of CATL’s major customers, rose about 2% in early trading.
The shutdown also highlights Beijing’s broader effort to address “involution” — a phenomenon where intense competition and price cuts in resource markets, such as lithium, slow overall industry progress rather than fueling growth.
Lithium has become a linchpin of the global energy transition, powering electric vehicles, renewable energy storage systems, and countless consumer electronics. The International Energy Agency projects demand could surge by up to 40% by 2040.
While lithium prices had plunged to their lowest since 2021 earlier this year due to oversupply, CATL’s move signals a potential turning point. Analysts at UBS, however, caution that short-term upside may be limited, noting that the market may have already bottomed but lacks a clear catalyst for sustained growth.
For now, investors are betting that tighter supply will give the lithium market a much-needed jolt.
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