FX.co ★ Lithium Holds Rebound

In August, lithium carbonate prices stood at CNY 71,000 per tonne, maintaining a significant recovery from the four-year low of CNY 60,200 observed on June 2nd. This turnaround is attributed to corporate maneuvers and governmental regulations aimed at alleviating concerns of oversupply. Notably, Zangge Mining, a prominent Chinese producer, was ordered by authorities to suspend operations due to insufficient documentation, effectively removing 11,000 tons of carbonate from this year’s supply, as guided by the company. Additionally, China's cabinet has committed to regulating competition within the electric vehicle sector as part of a broader strategy to address deflationary threats, which in turn could enhance battery manufacturers’ profit margins. Despite these factors, increased lithium production in China, Indonesia, and the Democratic Republic of the Congo continues to fuel competitive pressures in the market. According to the International Energy Agency (IEA), lithium supply surged by 35% last year, and output is expected to keep rising as miners strive to maintain market dominance and their partnerships with governments and battery producers, choosing not to shut down operations.