China Lithium Probe Shuts Down a Tenth of Global Supply

• Beijing sends environment officials to production hub: Yicai
• Battery metal’s price has been falling on oversupply fears

A month-long mining halt in Yichun would reduce lithium output by an amount equivalent to around 13% of the world’s total, analysts including Bai Junfei at Citic Securities Co. wrote in a note on Monday. Rystad Energy, a consultancy, estimated the amount at 8%.

“At present, the market speculation is that the probe may stop after the two sessions in China next month,” Rystad’s Zou said, referring to the annual parliamentary meetings due early March.

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Lithium Shares

Lithium producers in North America gained Monday morning, with Albemarle Corp. rising as much as 2.9% and Livent Corp. advancing 2.6%.

Analysts said the shutdown of the lithium production hub in China may do little to help prices of the metal rebound from a recent decline, at least in the near term.

“Any mine would typically have a stockpile of ore in place, so as long as the refineries are operating, you aren’t likely to see any whipsaw in lithium pricing,” said Chris Berry, president of House Mountain Partners, an industry consultancy. “Should these mines be halted for months, then this becomes a different story.”