Lithium Extends Plunge from 1-Year High

Lithium carbonate prices in China fell under CNY 135,000 per tonne in September, the lowest year-to-date, after an upward revision to stockpiles drove markets to price a more comfortable supply backdrop. Industry group SMM changed their methodology to compile inventory data that prompted a 175,000-ton increase in Chinese stockpiles, double the earlier estimates. This was combined with a strong outlook for Australian producers. Mineral Resources restarted Bald Hill lithium mine following an 18-month suspension, while Core Lithium restarted its Finniss project. A sharper pullback was prevented by more disruption in CATL's Jianxiawo mine, China's largest by capacity and responsible for 4% of global supply. Chinese authorities revoked their environmental approvals for the mine to extend the period of permit hurdles for over one year, coinciding with Beijing's anti-involution campaign and efforts to combat producer overcapacity.

Lithium carbonate prices in China fell to CNY 143,000 per tonne in September, the lowest in nearly one month, as the outlook of higher production in Australia offset supply uncertainty in China. Industry players reiterated the outlook of ample supply from major producers to maintain the ongoing supply surplus through the next decade. These were led by Australian lithium producers, with Mineral Resources restarting its Bald Hill lithium mine following an 18-month suspension, while Core Lithium restarted its Finniss project. A sharper pullback was prevented by more disruption in CATL's Jianxiawo mine, China's largest by capacity and responsible for 4% of global supply. Chinese authorities revoked their environmental approvals for the mine to extend the period of permit hurdles for over one year, coinciding with Beijing's anti-involution campaign and efforts to combat producer overcapacity.

Lithium prices in China rose to over CNY 150,000 per tonne in August, the highest in one month, as signs of growing demand offset the recent respite to supply. Chinese efforts at electrification of its economy drove local governments to pile on projects to develop electricity storage infrastructure in tandem with renewable power generation sources. Such projects were recently headlined by the Medog Hydropower Station and Beijing's announcement that it would double national EV charging capacity to 180 gigawatts by 2027. In turn, industry players highlighted uncertainty in the pace of operations to be restarted by CATL's Jianxiawo mine. Activity in the major lithium source was suspended last year as Beijing refrained from renewing its license, aligned with policymakers' efforts to combat producer deflation. Limiting the rebound, Mineral Resources will restart its Australian Bald Hill lithium mine following an 18-month suspension, while Core Lithium restarted its Finniss project.