Lithium Surges on Key Mine Closure

Lithium carbonate prices rose past CNY 75,000 per tonne in August, nearly erasing this year's slump to the highest since March as the possibility of lower output from key mines countered oversupply worries.

The Chinese government pledged capacity cuts to major industries that have suffered from deflationary pledges in recent years, driving investors to bet on an outlook of lower lithium supply out of the world's top refined lithium producer.

Expectations of an overhaul to mining policy gained traction after the world's top battery producer, CATL, suspended activity in its Jianxiawo mine after failing to extend a key mining permit.

The mine is responsible for around 5% of global supply.

Last year, global output was 35% higher on strong production from China, Indonesia, and the DR Congo.

Output from main producers was still set to grow this year as miners refrain from voluntarily close operations to retain market share and business relationships with governments and battery producers.