(Yicai) Sep. 12 -- Contemporary Amperex Technology confirmed that the battery titan is adjusting production at one of China’s biggest lithium mines, after a UBS report said it had halted output, easing concerns about a glut and sending the shares of major Chinese lithium producers higher.

Lithium output at Yichun in Jiangxi province will be adjusted in response to recent developments in the lithium carbonate market, CATL told Yicai yesterday. The Ningde-based company did not disclose any new production figures.

A report released earlier in the day by Swiss investment bank UBS said CATL had decided on Sept. 10 to temporarily suspend its lithium spodumene mining operations in Jiangxi, mainly because production costs exceeded lithium salt prices.

After peaking in 2022, global lithium prices tumbled, as a result of oversupply and slower-than-expected growth in electric vehicle demand. By the middle of this year, prices had steadied but were still far below record levels.

Balancing production costs with market prices has become a key challenge for the lithium mining sector, as a result of surging extraction costs, industry insiders told Yicai. CATL’s adjustment of output at Yichun could trigger a domino effect, potentially affecting the overall supply-demand dynamics of the lithium market, they added.

The market will be keeping a close eye on CATL’s move and the entire lithium mining industry to assess the impact of its production adjustment on the sector’s long-term development, the insiders noted.

Following the news, the shares of leading Chinese lithium miners soared by the 10 percent daily trading limit yesterday, including Tianqi Lithium [SHE: 002466] and Ganfeng Lithium [SHE: 002460]. Tianqi added another 1 percent today to CNY27.70 (USD3.89), while Ganfeng fell 2.8 percent to CNY27.06.

CATL [SHE: 300750] closed 1.5 percent higher today at CNY189.35 (USD26.58), after gaining 3 percent yesterday.

Editor: Futura Costaglione