Lithium carbonate futures in China experienced a sharp sell-off this week, declining approximately 10% over two consecutive trading sessions to reach a 10-week low of around 157,000 yuan ($23,175) per tonne on Tuesday. According to OilPrice, the decline was driven by market speculation that Contemporary Amperex Technology Co. (CATL), a major Chinese EV battery manufacturer, is preparing to restart its Jianxiawo lithium mine in Yichun.
The anticipated supply surge stems from reports that CATL's mine has cleared preliminary regulatory hurdles. Authorities in Jiangxi Province indicated that the Jianxiawo project passed a preliminary land pre-review and site selection process, with the provincial Department of Natural Resources approving the project documentation. The potential resumption of production at the facility has prompted traders to reposition ahead of increased lithium supply hitting the market.
The price movement reflects broader dynamics in the battery metal space, where supply concerns have dominated investor sentiment in recent months. With CATL signaling readiness to expand lithium production, market participants are adjusting positions in anticipation of a more abundant supply environment, putting downward pressure on near-term futures contracts.