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Investing.com -- Lithium stocks surged Monday after prices for the battery material spiked in China following bullish demand forecasts from a major producer. Sigma Lithium (NASDAQ:SGML) shares jumped 30%, while Lithium Americas (NYSE:LAC) rose 9% and Albemarle (NYSE:ALB) gained 8%.
The rally came after Ganfeng Lithium Group’s chairman Li Liangbin projected lithium demand would grow by 30% by 2026, according to local media Cailian. The Cailian report was later covered by Bloomberg News. The most-active lithium carbonate contract on the Guangzhou Futures Exchange surged 9%, closing limit-up at 95,200 yuan ($13,400) a ton following his comments.
Li suggested prices could potentially rise to 150,000 yuan or even 200,000 yuan a ton if demand growth exceeds expectations and reaches 40% next year. He noted that despite the current market surplus of about 200,000 tons, supply would struggle to keep pace with such rapid demand growth.
The optimistic outlook comes amid increased requirements for large-scale battery storage, which is helping offset slower-than-expected growth in electric vehicle sales. The battery industry is seeing rising demand for energy storage solutions that support electricity grids and power data centers for artificial intelligence applications.
The positive sentiment extended to Asian markets, where Ganfeng’s shares jumped as much as 8% in Shenzhen trading. Other Chinese lithium producers also rallied, with Tianqi Lithium and Sichuan Yahua Industrial Group both climbing by their 10% daily limit.
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