CATL, the Chinese lithium-ion battery producer, has revealed plans to cut lithium production in the province of Jiangxi, according to a Reuters report. The site accounts for 5–6% of the global lithium supply.
CATL, which recently launched the new long life Tectrans battery for trucks with an exceptional lifespan of up to 15 years or 2.8 million km, confirmed plans to adjust production of lithium carbonate in Yichun.
The closure of this lepidolite mine, a key source of lithium carbonate, has caused significant disruption in the market. The mine was expected to increase production from 60,000 tons of lithium carbonate equivalent (LCE) in 2024 to 95,000 tons in 2025, positioning it as the fifth-largest lithium mine globally. CATL is also considering pausing one of its three lithium carbonate production lines in Jiangxi.
Oversupply of lithium has also forced some Australian lithium producers such as Arcadium Lithium and Core Lithium to shutter high-cost sites. Albemarle shut half of its current processing capacity in Australia and put expansion there on hold due to the deepening price decline.
“The stoppage will spur an 8% cut in China’s monthly lithium carbonate output and will help rebalance the supply with demand,” Sky Han and an analyst team of the Swiss bank UBS said in a briefing note.
UBS expects 11–23% upside for lithium prices for the rest of 2024 and that lithium prices may enter an upturn in 2026. UBS also assumes that prices could stabilise between $10,000 and $11,000 per ton, reflecting global cash costs.
The upper limit is driven by CATL’s cost base, estimated at $10,968 per ton. Conversion costs of around $3,000 per ton could push spodumene prices up to as high as $1,000 per ton in the near term, compared to the current spot prices of about $730 per ton.
