Boost for Lithium Mining Stock as CATL Halts Yichun Production After Price Plunge

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CATL’s lithium concentrator accounts for half of Yichun’s lithium capacity.

An announcement by Contemporary Amperex Technology Co. Ltd. (CATL) that is to halt production at its giant lithium concentrator in Yichun, Jiangxi province, triggered a sharp rise in domestic lithium mining companies’ stocks.

Ganfeng Lithium Group Co. Ltd. and Tianqi Lithium Corp. hit their daily price limits Wednesday, while other lithium firms saw significant gains.

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CATL's halt in Yichun's lithium production caused a spike in domestic lithium mining stocks, with companies like Ganfeng and Tianqi hitting daily price limits.
Lithium prices have plummeted by 60%, impacting Yichun's production; CATL's plant operates at less than 50% capacity due to high costs from poor ore quality.
Yichun's economic struggles include a 14.41% drop in industrial revenue and a predicted industry consolidation by 2025, with hopes for market improvement by 2026.

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Who’s Who

Contemporary Amperex Technology Co. Ltd.: Contemporary Amperex Technology Co. Ltd. (CATL) halted production at its lithium concentrator in Yichun, Jiangxi province, due to a 60% drop in lithium prices and higher costs from poor-grade ore. Despite this, CATL's battery plant in Yichun operates near full capacity, sourcing lithium from cheaper suppliers. CATL entered Yichun in 2021, investing 13.5 billion yuan and securing mining rights, becoming the largest lithium concentrator in the city.

Ganfeng Lithium Group Co. Ltd.: Ganfeng Lithium Group Co. Ltd. saw its stock hit the daily price limit following CATL’s announcement to halt production at its lithium concentrator in Yichun. This surge occurred amid a general rise in stocks of domestic lithium mining companies. The halt came after a significant drop in lithium prices, impacting local production economics.

Tianqi Lithium Corp.: Tianqi Lithium Corp. experienced a significant stock price surge, hitting its daily price limit on Wednesday. This spike followed an announcement by Contemporary Amperex Technology Co. Ltd. (CATL) to halt operations at its lithium concentrator in Yichun due to steep price declines.

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What Happened When

2021：: CATL entered Yichun, investing 13.5 billion yuan ($1.9 billion) in a new lithium battery production base.

By 2022：: CATL had secured mining rights to a local lithium mine and became the largest lithium concentrator in Yichun.

2022：: Lithium prices peaked at 600,000 yuan per ton.

First five months of 2024：: Yichun's industrial revenue fell by 14.41% year-on-year, with profits down 81.48%.

September 2024：: Lithium prices dropped 60% from previous highs, down to 73,000 yuan per ton.

As of September 2024：: CATL's Yichun concentrator was operating at less than 50% capacity.

September 11, 2024：: CATL's announcement to halt production at its Yichun lithium concentrator caused a sharp rise in domestic lithium mining companies’ stocks.