Catl confirmed the closure on Monday (August 11) and said that it is looking for a licensing, but does not offer a timeline for resuming the output. The closure will take at least three months, according to people who are familiar with the case quoted by Bloomberg.
The mine produces around 65,000 tons of lithium carbonate equivalent (LCE) annually, equal to around 6 percent of the global output, according to estimates.
This makes the interruption one of the most important stock interruptions in recent years for a metal centrally in batteries of electric vehicles (EV), grid storage and consumer electronics.
The most active lithium carbonate Future contract on the Guangzhou Futures Exchange (GFEX) jumped on Monday (August 11) about the daily limit of 8 percent, and closed on 81,000 Yuan (US $ 11,280) per tonne for delivery of November.
In the meantime, the spot prices in China also climbed, with Asian metal reporting an increase of 3 percent to 75,500 Yuan per ton, the highest margin since February.
On the Liyang Zhonglianjin e-commerce platform, the supply prices of November increased more than 10,000 yuan to around 85,500 yuan per ton.
Chandler Wu, senior analyst for battery raw materials at fastmarkets, estimated That the closure would reduce approximately 5,000 tons of LCE from the monthly output of China.
Market sentiment had been building in the midst of speculation for weeks. The license of the mines may not be extended. By Wednesday, contracts on the GFEX were already sharp profits, with sellers on the spot market that increase offers in accordance with Futures prices.
Global Mining Stocks Rally
The supply shock sent the shares of Lithium Miners higher from Sydney to New York.
In the US Albemarle (NYSE: ALB) jumped more than 15 percent, Lithium Americas (NYSE: LAC) with 13 percent, and that of Chile SQM (NYSE: SQM) with 12 percent.
Australian producers saw similar profits: Pilbara Minerals (ASX: PLS, OTC Pink: Pilbf) climbed to 20 percent, Liontown Resources (ASX: LTR, OTC Pink: Linrf), rose 25 percent, and Mineral resources (ASX: Min, OTC Pink: Malrf) advanced 14 percent.
Analysts say that the suspension can be linked to the ‘Anti-Invention’ campaign of Beijing-a initiative aimed at curbing overcapacity and promoting more sustainable production in industry.
The policy theme recently wiped the financial markets of China and affected sectors from sectors to e-commerce and EVs.
China has been the world’s top processor of Lithium for years. Catl, the world’s largest battery maker, has also invested aggressively in raw material supply chains to ensure long -term access to critical minerals such as lithium, nickel and cobalt.
China has helped that vertical integration to dominate the global EV market, but it has also contributed to oversup problems in the lithium sector.
Catl emphasized that the Jianxiawo closing “little impact” would have the general activities.
Nevertheless, traders warn that the effects can be crossing if the suspension extends beyond Jianxiawo. Local authorities in Yichun reportedly asked eight other miners to submit reserve reports at the end of September after audits have demonstrated non-compliance with registration and approvals.
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Publication of securities: I, Giann Liguid, has no direct investment interest in a company mentioned in this article.
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