Lithium carbonate futures in China tumbled approximately 10% over two trading sessions, dropping to a 10-week low of roughly 157,000 yuan ($23,175) per tonne on Tuesday. The sell-off followed market speculation that Contemporary Amperex Technology Co. (CATL), the country's EV battery leader, may soon restart its massive Jianxiawo mine.
Reports from authorities in Jiangxi Province indicate that CATL's Jianxiawo lithium mine in Yichun passed a preliminary land pre-review and site selection. The Jiangxi Provincial Department of Natural Resources issued a project-related notice, fueling expectations of a fresh supply wave hitting an already oversupplied market.
Traders are bracing for the mine's restart to add significant tonnage to global lithium output, potentially deepening the current glut. Lithium prices have been under pressure for months due to slowing EV demand growth and rising production from Australia and South America.
The price decline underscores the fragile balance in critical mineral markets, where policy signals and corporate moves can trigger sharp swings. A restart of Jianxiawo—one of China's largest domestic lithium sources—would reinforce Beijing's push for self-sufficiency in battery supply chains.
While some analysts argue the market has overreacted, the rapid move highlights how reliant lithium pricing remains on sentiment around a few key producers. The episode also contrasts with growing Western efforts to build alternative lithium supply chains outside China.