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| China’s Qinghai province Lithium |
Focus Keyphrase: Lithium Prices
Lithium prices spiked sharply following the suspension of operations at a major salt lake lithium project in China’s Qinghai province. The halt, initiated by local regulators, directly affected Zangge Mining, a unit of Zijin Mining Group, which depends on lithium for over a third of its revenue. As a result, the Guangzhou Futures Exchange saw lithium carbonate futures jump as much as 5.5%—the highest in nearly three months.
Chinese Oversupply Concerns Ease, Stocks React
The halt temporarily eased global oversupply fears in the lithium market, which has been under pressure due to weak EV demand and aggressive capacity buildout. Zangge had produced 5,350 tonnes in H1 and targeted 11,000 tonnes for the year, making the disruption material in short-term sentiment.
As a result, global lithium stocks rallied. Chile’s SQM rose 6.19%, Albemarle climbed 5.95%, and Sigma Lithium surged 9.97% in NYSE trading. Meanwhile, market participants await clarity on when Chinese authorities will approve a restart, as regulatory scrutiny over excessive price competition intensifies.
Analysts Warn of Speculative Reaction Despite Short-Term Tightness
However, industry analysts view the lithium price spike as sentiment-driven. Galaxy Futures’ Chen Jing stated that the supply impact remains limited. The production pause affects short-term futures sentiment, not long-term fundamentals.
Therefore, while speculative flows may support prices in the near term, fundamentals suggest abundant lithium supply through 2025, especially from Australia and Latin America. This divergence creates volatility risk for recyclers and cathode material producers relying on predictable pricing.
ScrapInsight Commentary
The temporary halt at Zangge Mining offered a short-lived reprieve for lithium prices but underscored the market’s oversensitivity to supply headlines. Recyclers should anticipate continued price volatility through 2025, as regulatory shifts in China and margin compression in primary mining influence trading behavior and secondary lithium demand.
