(Yicai Global) April 6 -- Less than a month after a number of Chinese lithium miners and processors in Yichun, eastern Jiangxi province were given the greenlight to start production again following an environmental probe, many of these firms have halted operations once more as the price of lithium carbonate falls below the break-even point due to weak battery sales.

The price of battery-grade lithium carbonate has tumbled below CNY250,000 (USD36,330) per ton, and two of the four main lithium producers based in Yichun have stopped lithium extraction, online news outlet The Paper reported yesterday, citing market insiders.

Earlier this year, the lithium slag generated from the lithium carbonate production process became an area of environmental concern, triggering a government probe into possible illegal mining activities in Yichun, which is known as Asia's Lithium Capital and produces around 40 percent of China's lithium carbonate.

Many lithium miners and processers, including the four main ones Jiangxi Yongxing Special Steel New Energy Technology, Jiangxi Special Electric Motor, Jiangxi Feiyu New Energy Technology and Nanshi Lithium, were ordered in February to halt operations and those who were found to be compliant only got back to work in the middle of last month, according to previous reporting by Yicai Global.

But now lithium producers are finding themselves under pressure from oversupply in the electric car battery market. China’s NEV sales growth has slowed dramatically after subsidies, which had been in place for 13 years, came to an end at the end of last year.

Electric car sales advanced 25 percent in the first quarter from the same period last year to 1.4 million units, a big slowdown from 2022 when growth was over 90 percent, according to the latest data from the China Passenger Car Association.

In the first two months, China produced 69.6 gigawatt hours of batteries, and just 38.1 gigawatt hours were installed in vehicles over the period, according to figures from the China Automotive Battery Innovation Alliance.

Editor: Kim Taylor