CATL Halts Lithium Production in Jiangxi

CATL (300750.SZ) has halted lithium production in Jiangxi, causing shares of major lithium producers to surge after a prolonged price slump.

Analysts Confirm Production Suspension

UBS analyst Sky Han and his team have confirmed CATL’s suspension of operations at its Jiangxi facility. Shares of top lithium producers like Ganfeng Lithium (002460.SZ) and Tianqi Lithium (002466.SZ) soared, reaching the 10% daily trading limit.

Adjustments Based on Market Conditions

Local media reports confirmed the production halt. A CATL representative stated that lithium carbonate production in Yichun will be adjusted according to market conditions.

Cost and Market Price Analysis

UBS analysts estimate CATL’s cash cost for lithium carbonate mining in Yichun at $10,968 per ton. With the market price currently lower, CATL faces ongoing financial pressure.

Impact on Lithium Prices

The production halt is expected to reduce China’s lithium carbonate output by 8%, stabilizing prices. UBS projects an 11% to 23% price increase in 2024.

Potential Resumption of Production

Analysts suggest that if lithium prices rise to $10,968 per ton, CATL might resume production, impacting future market dynamics.

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