Lithium stocks drop as CATL’s refinery restart weighs on prices

Asian lithium producer shares fell as a restart of a Chinese refinery run by Contemporary Amperex Technology Co. Ltd. and Jiangsu Lopal Tech Co. Ltd. risks weighing on potential price recovery of the battery metal.

The resumption, which came after a nearly five-month halt, could pressure on a market that’s already grappling with a surplus and a shakier outlook for electric vehicle demand. Lithium prices have yet to see a meaningful rebound since collapsing about 90% from a peak in 2022, despite a slew of producers worldwide cutting spending or delaying expansions.

Jiangsu Lopal’s shares fell as much as 3.6% in Hong Kong. In Shenzhen, CATL retreated together with Tianqi Lithium Corp. and Ganfeng Lithium Group Co. The shares of some lithium miners also dropped in Australia.

The reopening should be negative for lithium sector share prices, and the spot price, analysts at Daiwa Capital Markets said in a note, adding that possible reasons behind the decision to restart may be due to CATL’s low lithium inventories or a positive outlook for downstream demand in the second quarter.

(By Annie Lee)