CATL Halts Key Lithium Mine, Supply Squeeze Drive Analysts Predictions

News of the suspension, initially circulated by UBS based on industry sources, was later confirmed by CATL itself. In a statement to Reuters, they acknowledged that "based on recent lithium carbonate market conditions, the company plans to make adjustments on lithium carbonate production in Yichun."

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The move is expected to reduce China's monthly lithium carbonate production by about 8%, equivalent to around 5,000 to 6,000 tons.

The immediate impact was a surge in lithium prices, as lithium carbonate futures on the Guangzhou Futures Exchange jumped 5.5%, reaching 76,700 yuan per ton ($10,700), though still down 27% year-to-date.

The unexpected sentiment shift triggered a supply short squeeze as short-sellers scrambled to cover their positions. Australian lithium ...