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Investing.com - CATL’s Jianxiawo lithium mine has suspended production for at least three months after failing to secure a permit extension that expired on August 9, according to KeyBanc. The news comes as major lithium producer Albemarle (NYSE:ALB) shows mixed signals, with InvestingPro data revealing a significant 10% stock gain over the past week despite ongoing profitability challenges.
The affected facility has a capacity of 24-36KT, representing approximately 2-3% of global lithium supply or 5-8% of China’s capacity. CATL is currently in discussions with the Chinese government for permit renewal, with expectations that the plant will remain offline for several months.
This shutdown follows mid-July reports from the Yichun Natural Resource Bureau identifying permit issues at eight lithium mines with a collective capacity of approximately 70KT LCE, equivalent to about 15% of China’s capacity or 5% of global supply. These sites have until September 30 to verify their reserves and comply with permit requirements.
Production at Zangge Mining’s site in China has also been halted since mid-July due to non-compliant mining practices. This mine was projected to produce approximately 11KT this year, representing about 2% of China’s lithium capacity.
Despite these supply disruptions supporting spot and futures prices in China, KeyBanc maintains a cautious stance on lithium prices, noting that lithium inventories increased 2% month-over-month and 8% year-over-year in July according to Benchmark Minerals, while July EV sales in China fell 11% month-over-month amid elevated inventory levels. This market uncertainty is reflected in Albemarle’s metrics, with InvestingPro analysis showing the company trading at a high EBITDA multiple of 26x and facing near-term profitability headwinds. For deeper insights into the lithium market and comprehensive analysis of ALB, investors can access the detailed Pro Research Report, available exclusively on InvestingPro.
In other recent news, Albemarle Corporation reported its second-quarter 2025 earnings, which showed a significant revenue beat against forecasts. The company achieved revenue of $1.33 billion, surpassing the expected $1.22 billion by 9.02%. Despite this, the earnings per share (EPS) of $0.11 fell short of the forecasted -$0.78, marking a surprise of -114.1%. Additionally, Oppenheimer raised its price target for Albemarle to $109.00 from $107.00, maintaining an Outperform rating on the stock. This adjustment followed Albemarle’s strong quarterly results, even though the company chose to maintain its existing guidance. Meanwhile, the lithium market saw a significant development as Contemporary Amperex Technology Co Ltd (CATL) announced the suspension of production at a major lithium mine in China. The mine is responsible for approximately 3% of the world’s total forecast lithium output in 2025. These developments highlight recent movements within the lithium industry, impacting companies like Albemarle.
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