Chinese lithium and cobalt sulphate prices fell last month for the first time since June 2021 as COVID-19 lockdowns in the country halted downstream cathode production.

Chinese battery-grade lithium prices fell by 5% in April to a mid-point of RMB 478,000 ($72,000) and the cost of cobalt sulphate fell by 6% to RMB 112,500 ($17,000) a tonne , according to Benchmark’s Lithium Price Assessment and Cobalt Price Assessment, respectively.

Chinese cathode producers are drawing down on their inventories of battery raw materials rather than making new purchases, according to George Miller, an analyst at Benchmark.

Meanwhile, halted downstream cathode production weakened demand, according to Benchmark.

The analysts also suggest that China’s “zero-COVID” policy could slow sales of electric vehicles as consumers remain at home, while logistical difficulties caused by the lockdowns in Shanghai and elsewhere are disrupting supply chains for automakers and battery producers.

Automakers including Tesla, Nio and Volkswagen were forced to temporarily halt production earlier this year, with Tesla resuming “limited production” at its plant in Shanghai.