In July, the price of lithium carbonate increased to CNY 68,000 per tonne, marking a recovery from the four-year low of CNY 60,200 recorded on June 2nd. This price hike followed the suspension of a significant mining operation, which reduced the excess supply of materials used in battery production. Zangge Mining, a major producer based in China, reported that it was compelled to halt operations due to documentation issues, an order from the authorities. This suspension is expected to cut 11,000 tons of carbonate from the market this year, easing fears that a surplus could exacerbate China's deflationary pressures on producers.
Despite this, increased lithium production from China, Indonesia, and the Democratic Republic of the Congo has intensified competitive selling pressures. According to the International Energy Agency (IEA), lithium supply soared by 35% last year. Production levels are anticipated to continue rising as miners are reluctant to shut down operations, aiming to preserve their market share and maintain relationships with governments and battery manufacturers. Concurrently, government incentives, such as trade-in rebates, have stimulated a 29.7% increase in electric vehicle sales in China for June.
