Lithium Futures Drop 9% in China Amid Mine Restart Speculation

Lithium carbonate futures in China experienced a sharp 9% decline over two days, primarily driven by speculation surrounding the potential restart of Contemporary Amperex Technology Co. Ltd.'s (CATL) Jianxiawo lithium mine in Jiangxi province. This downturn was exacerbated by the Guangzhou Futures Exchange (GFEX) implementing measures to curb speculative trading, including increased transaction fees and limits on daily open positions.

The Jianxiawo mine, a significant source of lithium, has been offline since August 2025 due to an expired mining license. CATL is reportedly seeking a renewal and has prepared its smelters for a potential resumption of operations, though no official restart date has been confirmed. The mine has the capacity to produce over 46,000 tonnes of lithium carbonate equivalent (LCE) annually, representing about 3% of the projected global supply for 2025.

Analysts view the GFEX's actions as a direct attempt to cool down speculative activity that had contributed to a recent price rally. The market remains sensitive to supply signals from major Chinese producers and regulatory interventions, highlighting the ongoing volatility in the sector as it seeks equilibrium between supply and demand.