FX.co ★ Lithium Extends Plunge from 2-Year High

Lithium carbonate futures experienced a decline to CNY 145,000 per tonne, down from a peak of CNY 180,000 on January 26th. This movement is attributed to a considerable retraction in speculative activities within the metals market, as investors reassess the demand stemming from power storage investments in key global economies. In April, Chinese authorities reduced export rebates for battery producers, prompting manufacturers to expedite their lithium orders. Concurrently, the Chinese government's ambitious investments in power and data center infrastructure, coupled with the announcement to increase power storage spending, bode well for lithium and other battery metals. Furthermore, Beijing has declared its intention to double electric vehicle (EV) charging capacity to 180 gigawatts by 2027, thus boosting the demand for lithium-rich energy storage systems. In a related development, 27 mining permits were revoked in Jiangxi, a prominent lithium hub, coinciding with the earlier halt in operations at CATL's Jianxiawo lithium mine as part of Beijing's campaign against involution.