A Bloomberg News report said earlier that the mine, responsible for 3% of the global supply, could remain shut for at least three months.
Chinese electric vehicle battery-making giant Contemporary Amperex Technology (CATL) announced that it has suspended operations at its Yichuan project due to the expiry of its mining license.
“We are processing the application for renewal of the mining license as soon as possible in accordance with relevant regulations, and will resume production as soon as possible after obtaining approval,” the company said in a statement on an investor’s interactive platform.
While the company did not specify for how long the mine will remain shut, a Bloomberg News report stated earlier that CATL may not be able to produce the crucial element used in EV batteries from the project for at least three months.
CATL stated on Monday that the shutdown of the mine in Jiangxi Province will have little impact on the company’s overall operations.
Retail sentiment on Stocktwits for Albemarle, the top U.S. lithium producer, as well as for U.S.-listed shares of Chile’s SQM, was ‘neutral’ late Sunday.
However, this could change as the market opens on Monday. The most active lithium carbonate futures on the Guangzhou Futures Exchange jumped by 8% and hit the price limit following the shutdown of the mine responsible for 3% of the global lithium output.
A rise in global supplies, primarily from China, has caused a 90% decline in lithium prices over the past 24 months, prompting companies to curtail some production and even announce layoffs. Albemarle has also laid off employees and canceled the development of a lithium refinery in the U.S.
“These mine closures look good running into a potential Trump & Xi meeting,” one user said on Stocktwits. U.S. companies have previously complained about Chinese companies flooding the market to artificially lower prices.
Albemarle stock has fallen 12.7% this year, while SQM stock has gained 14.7%.
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