FX.co ★ Lithium Holds Pullback from 1-Year High

Lithium carbonate prices stabilized around CNY 73,500 per tonne, following a decline from the one-year high of CNY 87,100 recorded in August. This adjustment comes amid market speculation regarding the potential effects of China's anti-involution policies on supply chains. The Chinese government has reportedly greenlit reserve reports, allowing for the resumption of activities at CATL's Jiangxi mine. These developments have offset the earlier uptick in lithium prices, which surged when CATL faced challenges in renewing its mining permits at a site accounting for about 3% of the global supply. In addition to boosting supply from the Jiangxi operations, these government decisions have also curtailed the extent of supply reductions intended to mitigate deflationary trends within the country’s new capacity-reduction strategy. Meanwhile, China's electric vehicle manufacturers maintained robust sales volumes, choosing to withhold price discounts to effectively compete for market share, thereby sustaining strong demand from battery producers.