The suspension of the lithium mine project by CATL has triggered concerns over supply tightness, leading to a pre-market surge in U.S.-listed lithium stocks
The suspension of CATL's lithium mine project has led to a surge in U.S.-listed lithium stocks, with Albemarle Corp rising nearly 9%, Sociedad Quimica y Minera up 6.5%, and Lithium Americas increasing by nearly 9%. Smaller companies such as Standard Lithium, Piedmont Lithium, and Sigma Lithium saw gains ranging from 5.6% to 13.8%. Morgan Stanley analysts expect the lithium supply surplus to decrease to 60,000 tons by 2025, with short-term risks of rising lithium prices, but long-term attention still needed on supply constraints
Reuters, August 11 - Lithium mining stocks listed in the United States surged on Monday, as a lithium mining project by Chinese battery giant CATL (300750.SZ) was suspended, raising hopes that this would alleviate the current oversupply situation in a market suffering from weak demand.
In pre-market trading, Albemarle Corp (ALB.N) soared nearly 9%, Chile's Sociedad Quimica y Minera (SQM.N) rose 6.5%, and Lithium Americas (LAC.N) increased by nearly 9%.
Among smaller companies, Standard Lithium (SLI.N), Piedmont Lithium (PLL.O), and Sigma Lithium (SGML.O) saw gains ranging from 5.6% to 13.8%. Mining stocks in China and Australia also rebounded.
The lithium industry has been struggling due to oversupply as electric vehicle demand growth has fallen short of expectations.
Morgan Stanley analysts stated that they expect a supply surplus of only 60,000 tons in 2025, but this production halt could reduce that surplus. "There is a risk of lithium prices rising in the short term," they noted, adding that if other production halts follow, it could bring the market closer to balance.
However, in the long run, if there are no further supply constraints, the surplus situation will re-emerge
