Lithium Price Recovery Threatened as Chinese Refinery Resumes Operations
Yichun, China - Jiangsu Lopal Tech Co. and Contemporary Amperex Technology Co. Ltd. (CATL) are reopening their lithium refinery in Yichun, Jiangxi province, following a five-month closure. The move threatens any potential price recovery for lithium, a key component in electric vehicle (EV) batteries.
The refinery, a joint venture between Jiangsu Lopal and CATL (the world's leading EV battery manufacturer), is projected to produce approximately 3,500 tons of lithium carbonate this month. CATL has not yet responded to requests for comment.
The refinery's restart adds to concerns of oversupply in the lithium market, which has already seen prices plummet by nearly 90% since late 2022. This decline is attributed to both overproduction and slower EV demand growth than anticipated.
The refinery's closure in mid-September was attributed to reduced output at CATL's nearby mine, a major source of low-grade lithium ore (lepidolite). Many analysts anticipate a continued supply surplus throughout the year.