FX.co ★ Lithium Extends Plunge from 1-Year High

Recent developments have seen lithium carbonate prices decline to CNY 74,600 per tonne, following a high of CNY 87,100 on August 19th. This price adjustment comes as supply constraints in China have eased. Notably, mining operations in CATL's Jiangxi site are poised to resume ahead of schedule, contrary to market expectations and significantly impacting the lithium market. The anticipated reopening mitigates the price surge previously seen when CATL was unable to renew its mining permits, crucial for approximately 3% of the global lithium supply. Moreover, this development has affected the scale of potential supply reduction measures the Chinese government might implement as part of its strategy to combat deflationary pressures with new capacity-reduction initiatives. Concurrently, the Chinese electric vehicle sector continues to report robust sales, as manufacturers maintain pricing strategies to secure market share, thereby sustaining demand from battery producers.