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Investing.com -- Lithium prices are expected to face renewed pressure after reports suggested Contemporary Amperex Technology Co. Ltd. (CATL) is close to restarting operations at its Jianxiawo mine, according to Macquarie analysts.
News from China’s Securities Times indicated a resumption meeting had been held “to advance the resumption of the Jianxiawo lithium mine.”
The publication also reported that “mining rights and licence applications were progressing smoothly and faster than market expectations” and that production was “expected to resume soon.”
Jianxiawo, which has around 100,000 tonnes per annum of lithium carbonate equivalent capacity, has been suspended. Macquarie analysts said its return would significantly affect the supply outlook.
“Should Jianxiawo reopen, we would expect prices may move to below Jianxiawo’s break-even of 80-85k RMB/t to 70-75k RMB/t, which may push spodumene prices to US$800-850/t (or lower),” they wrote.
By contrast, if the mine remained closed, Macquarie expected the CY26 market to tighten, supporting prices in the range of US$1,000-1,100 per tonne. But with the latest reports signalling a restart, Macquarie warned that “leverage was to the downside should the mine reopen.”
Still, the analysts cautioned that timing remains uncertain. “Whilst the news report outlined timing was expected soon, it is unclear whether this was positioning by the company to appease local government and key stakeholders as to the employment levels at the operation,” they noted.
For equities, Macquarie highlighted that companies with higher exposure to lithium pricing are most at risk. “MIN (U-PF) carries high financial leverage and LTR (U-PF) high operating leverage, whilst IGO has the lowest of all three,” the analysts wrote.