01.09.202511:41:29UTC+00Lithium Pares Q3 Rally

Lithium carbonate prices decreased to CNY 79,650 per tonne, following a peak at a one-year high of CNY 87,100 on August 19th. This downturn occurred as the market reassessed the impact of supply reductions from China. Earlier, prices had escalated by over 40% since the beginning of the third quarter, following the suspension of operations by CATL, the world's leading battery manufacturer, at its Jianxiawo mine due to the inability to renew a critical mining permit. This particular mine contributes approximately 5% to global supply. The cessation of supply from this mine also suggested the potential for the Chinese government to intensify its efforts to reduce capacity in sectors plagued by oversupply and to address producer deflation. Despite these developments, lithium carbonate inventories in China climbed by more than 30% to 150,000 tonnes as of May, as competition for market share prompted companies to overlook low production prices. Additionally, uncertainty regarding whether Beijing will continue with its aggressive capacity reductions for lithium, following possible initial actions, also tempered the third quarter's price rally.