Australian Lithium Stocks Jump as CATL Confirms Production "Adjustments" at Major Mine

Chinese battery maker Contemporary Amperex Technology (CATL) (SZSE:300750) is making changes to lithium production at a mine in Yichun, Jiangxi, the company confirmed on Wednesday (September 11).

Bloomberg quotes UBS (NYSE:UBS) as saying the move could cut China’s monthly lithium carbonate output by 8 percent, helping alleviate the current oversupply in the market, which has weighed heavily on prices over the past year.

In a statement provided to Reuters, CATL said, "Based on recent lithium carbonate market conditions, the company plans to make adjustments to production in Yichun." The news from the company triggered a swift response in the market, with lithium futures prices rising and lithium company share prices seeing notable boosts.

ASX-listed lithium stocks such as Pilbara Minerals (ASX:PLS,OTC Pink:PILBF) and Liontown Resources (ASX:LTR,OTC Pink:LINRF) saw increases, respectively jumping as much as 16 percent and 18 percent on Wednesday.

Mineral Resources (ASX:MIN,OTC Pink:MALRF) and Core Lithium (ASX:CXO,OTC Pink:CXOXC) also enjoyed significant share price bumps, rising about 21 percent and 12 percent, respectively.

Core Lithium is one of several Australian lithium miners that has opted to cut production due to low prices. The company suspended operations at the Grants open pit at its Finniss mine in the Northern Territory in January.

UBS believes the cuts from CATL will result in 11 to 23 percent upside for lithium prices in the rest of 2024.

The firm also notes that speculation about production halts at CATL's mine have been made in the past and proven to be false; however, this time it has higher conviction that the news is accurate.

No further comments had been gathered from CATL at the time of this writing.

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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.