Shares of North American lithium producers soared as investors bet that the suspension of a major Chinese mine would ease a supply glut and be likely to lead to a rebound in prices.
CATL, the world’s biggest battery producer, confirmed the closure of its Jianxiawo mine on Monday, saying it is seeking to renew its expired permit.
The fate of the mine, the largest in China’s lithium hub of Yichun, had been under close scrutiny for weeks amid speculation that authorities would not extend its licence.
The mine accounts for about 6 per cent of global output, according to Bank of America.
“In the short term, abrupt supply cuts would trigger further price volatility, disrupt the domestic battery industry and benefit foreign lithium miners,” said Martin Jackson, head of battery raw materials at consultancy CRU Group.
Shares of US producer Albemarle rose nearly 16 per cent on Monday in New York in its biggest intraday increase in four months.
