Lithium Rebounds Toward 2-Year High

Lithium carbonate prices in China were at CNY 155,000 per tonne in March, trading at a narrow range since pulling back from the one-month high of CNY 173,000 earlier this month amid softer demand. Electric vehicle sales by top Chinese manufacturer BYD tanked 40% annually in February, a reversal from the growing trend in the previous months to raise concerns that the Chinese EV market may be slowing. The data magnifies worries that higher energy costs due to war in the Middle East could hamper large manufacturers from building input goods inventories, driving industrial metals to pull back. Still, Chinese supply was also expected to remain muted due to Beijing's anti-involution campaign. Authorities have already canceled 27 mining permits in the lithium hub of Jiangxi, aligned with the earlier suspension of activity in CATL's Jianxiawo lithium mine. Also, Zimbabwe suspended exports of lithium concentrates to put pressure on consumers to set up their refining operations in the country.

Lithium carbonate futures in China fell to CNY 155,000 per tonne from the one-month high of 175,000 from late February amid signs of a pullback in demand. New data showed that electric vehicle sales by top Chinese manufacturer BYD tanked 40% annually in February, a reversal from the growing trend in the previous months to raise concerns that the Chinese EV market may be slowing. The data magnifies worries that higher energy costs due to war in the Middle East could hamper large manufacturers from building input goods inventories, driving industrial metals to pull back. Still, Chinese supply was also expected to remain muted due to Beijing's anti-involution campaign. Authorities have already canceled 27 mining permits in the lithium hub of Jiangxi, aligned with the earlier suspension of activity in CATL's Jianxiawo lithium mine. Also, Zimbabwe suspended exports of lithium concentrates to put pressure on consumers to set up their refining operations in the country.

Lithium futures in China were above CNY 170,000 per tonne, approaching the over-two-year high of CNY 181,000 touched on January 26th, tracking the positive momentum for industrial metals on signs of robust demand and fresh risks to supply. Zimbabwe suspended exports of lithium concentrates and other raw materials to increase its pressure on consumers to set up their refining operations in the country. This extended supply pressure as Chinese authorities canceled 27 mining permits in the lithium hub of Jiangxi, aligned with the earlier suspension of activity in CATL's Jianxiawo lithium mine amid Beijing's anti-involution campaign. Demand remained supported by Chinese investment in power infrastructure, recently exemplified by the announcement of higher power storage spending. This was combined with Beijing stating it would double national EV charging capacity to 180 gigawatts by 2027, supporting lithium-rich energy storage systems.