FX.co ★ Lithium Extends Rebound to 2-Month High

Lithium carbonate futures have increased to CNY 79,000 per tonne, reaching a two-month peak due to an improved demand outlook. The Chinese government has signaled renewed support for the electric vehicle sector and lithium-rich energy storage systems by introducing compensation mechanisms for power storage infrastructure. This initiative aims to double EV charging capacity to 180 gigawatts by 2027. Additionally, the production of new energy vehicles in China rose by 20.3% year-on-year in September, marking the highest growth rate since the beginning of the year. Consequently, industry data indicated a decline in lithium inventories for downstream sectors for the third consecutive week. Despite these factors, the relatively abundant supply has prevented futures from reaching the one-year high attained in August. Moreover, Chinese authorities have reportedly approved reserve reports for resuming operations at CATL's Jiangxi mine. This development mitigates the spike in lithium prices following CATL's challenges in extending mining permits at this site, which accounts for approximately 3% of global supply.