Shares of lithium mining companies have staged a notable rebound over the past two weeks after months of declines, driven by concerns over potential supply disruptions. Last month, Contemporary Amperex Technology (CATL), China’s electric-vehicle battery giant, announced it had halted production at one of its most important mines after the expiration of a key operating permit.
The company said operations were suspended at the Jianxiawo mine—one of the world’s largest lithium deposits, accounting for around 3% of global supply—sparking speculation that Beijing could suspend additional projects as part of its efforts to address industrial overcapacity.
Sigma Lithium (NASDAQ: SGML) led the rally, surging 17.3% on the news, followed by Lithium Americas (NYSE: LAC) up 10.2%, Piedmont Lithium (NASDAQ: PLL) up 8.7%, Albemarle (NYSE: ALB) up 7.8%, and SQM (NYSE: SQM) up 7.6%. Lithium hydroxide futures jumped to their highest in over a year, while the Global X Lithium & Battery Tech ETF (NYSEARCA: LIT) climbed nearly 6% toward a nine-month high.
Albemarle, based in Charlotte, North Carolina, received multiple upgrades from Wall Street banks following these developments. UBS raised its rating on ALB from “sell” to “neutral,” setting a price target of $89, about 4.8% above current levels.
UBS forecast spodumene prices could rise as much as 32% and lithium chemicals up to 17% over the next three years, citing recent shutdowns, including the Jianxiawo halt in August, the suspension at Zangge Mining on July 14, potential closures of seven lepidolite mines in Yichun after September 30, and curtailed output at Citic Guoan’s Qinghai facility in late August. UBS also said Jianxiawo could remain offline for a full year amid stricter mining-rights inspections. Albemarle shares have risen 16.7% over the past 30 days.
Yet several Wall Street firms have warned that lithium bulls may be overestimating the impact. The global lithium market still has abundant supply, and actual disruptions may prove less significant than the recent equity rally suggests. For example, lithium carbonate inventories in China rose more than 30% to 150,000 tons in May, while producers continue to battle for market share despite lower prices.
KeyBanc analyst Alexey Yefremov cautioned investors against chasing the rally, warning that long-term prices “lack fundamental support” given the buildup in inventories.
Beyond the recent rally, lithium has been in a prolonged downturn reflecting not only oversupply and slowing EV sales but also major policy and structural shifts across three continents. China has restructured its subsidy programs, the United States has imposed tariffs, and Chile is moving to expand state control—changes that are reshaping cost structures and capital flows. At the same time, new supply from Africa and Australia is keeping prices under pressure.
Uncertainty remains over whether Beijing will strictly enforce production cuts. Analysts warn that if reductions fall short of expectations, sentiment could reverse quickly, triggering a correction in lithium stocks.
Global supply still exceeds demand, challenging earlier forecasts that inventories would normalize by 2025. Prices remain weak due to a combination of rising output from new projects, selective production cuts, and technological advances reducing lithium intensity in batteries—such as the wider adoption of lithium iron phosphate (LFP) batteries and the emergence of sodium-ion (Na-ion) alternatives.
LFP batteries, which use lithium iron phosphate (LiFePO₄) as a cathode material, are known for their safety, long cycle life, and lower cost because they avoid expensive or conflict-linked metals like cobalt and nickel. They are increasingly favored for EVs and renewable energy storage systems.
Na-ion batteries are an emerging alternative to lithium-ion, offering potential cost savings, better safety, and performance in low-temperature conditions. Although still early in development and facing challenges such as lower energy density and incomplete supply chains, Na-ion cells deliver faster charging and longer cycle life than some lithium chemistries, making them a promising technology, particularly for countries rich in sodium resources such as India.
