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Investing.com -- Shares of Chinese lithium producers surged after Contemporary Amperex Technology (CATL), the world’s largest electric vehicle battery maker, suspended operations at a major mining project in Jiangxi province.
Ganfeng Lithium (HK:1772), Tianqi Lithium, and Chengxin Lithium Group all jumped 10% in trading after CATL announced Monday that its license for a mine in Yichun, Jiangxi, had expired on August 9, forcing a production halt at the site.
CATL indicated it would resume production once its license is renewed and stated the suspension would have no material impact on its operations. However, the news sparked a rally in lithium stocks as investors anticipated potential supply constraints that could boost lithium prices.
The lithium market, a critical component in EV batteries, has been closely watched by investors as global demand fluctuates amid shifting electric vehicle adoption rates. Chinese lithium producers have faced significant price volatility over the past year.
CATL, which supplies batteries to major automakers including Tesla (NASDAQ:TSLA), has been expanding its mining operations to secure raw materials for its battery production. The temporary suspension of the Yichun mine represents a notable disruption in China’s domestic lithium supply chain.
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