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Albemarle Corp (NYSE:ALB) soared 10.57% while other lithium stocks Lithium Americas Corp (NYSE:LAC) and Sociedad Quimica y Minr de Chile SA (NYSE:SQM) climbed 9.32% and 7.39%, respectively, in premarket trading on Monday, amid hopes that the halt in operations at CATL’s mine could potentially affect the global lithium supply and push up prices.
CATL, the Chinese battery giant, announced a halt in operations at a lithium mine in China, which is expected to contribute about 3% of the world’s total lithium output by 2025.
The lithium sector has been grappling with oversupply amid slower-than-expected growth in electric vehicle demand. Still, the most-traded lithium carbonate futures in Guangzhou jumped the 8% daily limit after CATL announced that its mining license for the Yichun project in Jiangxi province had expired on Aug. 9 and was in the process of being renewed, reported Reuters.
Morgan Stanley analysts suggest that this outage could reduce the small 60,000-tonne surplus they predict for 2025, potentially leading to “upside risk to lithium prices in the short term” and potentially bringing the market closer to balance if additional disruptions occur.
Stocks of other lithium companies such as Piedmont Lithium (NASDAQ:PLL) and Standard Lithium (NYSE:SLI) also witnessed gains between 9% and 11% during Monday’s pre-market trading.
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The suspension of CATL’s lithium mine comes at a critical time for the lithium industry. Albemarle, a key player in the lithium market, recently reported a strong Q2 earnings beat and robust guidance.
Speaking of CATL, reports indicate that General Motors (NYSE:GM) will source LFP batteries from China's CATL until its partner LG starts production at the Tennessee plant in 2027. These imported batteries will power the upcoming $30,000 Bolt EV, GM's most affordable electric car. However, the report notes that Chinese battery imports face steep costs, with tariffs exceeding 80%.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
