Finance
Lithium stocks rally as CATL mine halt raises prospects of tighter supply
Published by Global Banking & Finance Review®
Posted on August 11, 2025
2 min readLast updated: January 22, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on August 11, 2025
2 min readLast updated: January 22, 2026
Lithium stocks rose as CATL halted a major mine, suggesting tighter supply. Analysts foresee short-term price increases but long-term market balance remains uncertain.
(Reuters) -Shares of lithium producers surged on Monday after Chinese battery giant Contemporary Amperex Technology (CATL) halting output at a major mine raised hopes it would erode the oversupply in a market grappling with soft demand.
During morning trade, Albemarle Corp jumped 10.2%, while Chile's Sociedad Quimica y Minera, rose 9.2% and Lithium Americas, gained 2.4%.
Smaller companies, Standard Lithium, Piedmont Lithium and Sigma Lithium, advanced between 6.2% and 19.6%. Chinese and Australian miners also rallied.
The lithium sector has been struggling with a glut following weaker-than-anticipated growth in demand for electric vehicles.
The most active lithium carbonate futures in Guangzhou rose the 8% daily limit after CATL said its mining license for the Yichun project in Jiangxi province expired on Aug. 9 and renewal was underway.
The site can produce more than 46,000 metric tons of lithium carbonate equivalent a year, roughly 3% of the global supply forecast for 2025, according to data from the Australian government.
Morgan Stanley analysts said the outage could erode the small 60,000-tonne surplus it expects for 2025, bringing "upside risk to lithium prices in the short term" and potentially moving the market closer to balance if other disruptions follow.
Longer-term, they expect a surplus to re-emerge without further supply discipline.
Morningstar analyst Vincent Sun said the suspension was "an indication that the industry is taking proactive steps to contain further lithium price falls observed year-to-date."
With lithium prices now below the marginal cost of production, the move could be perceived as a positive driver to limit supply growth and rebalance the market, he said, but added it was "still too early to confirm a price recovery trend for the rest of the year."
(Reporting by Arunima Kumar in Bengaluru; Editing by Leroy Leo)
Lithium stocks surged after CATL announced a halt in output at a major mine, raising hopes for tighter supply.
Albemarle Corp jumped 10.2%, Sociedad Quimica y Minera rose 9.2%, and Lithium Americas gained 2.4%.
Analysts believe the suspension could reduce the anticipated surplus of lithium and create upside risk for prices in the short term.
The Yichun project can produce over 46,000 metric tons of lithium carbonate equivalent annually, which is about 3% of the global supply forecast for 2025.
While there is potential for short-term price increases due to supply constraints, analysts warn that a surplus may re-emerge without further supply discipline.
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