China is oversupplying lithium to eliminate rivals, US official...

China is oversupplying lithium to eliminate rivals, US official says
LISBON, Oct 8 (Reuters) - Chinese lithium producers are flooding the global market with the critical metal and causing a "predatory" price drop as they seek to eliminate competing projects, a senior U.S. official said on a visit to Portugal that has ample lithium reserves.
Jose Fernandez, under secretary for economic growth, energy and the environment at the U.S. Department of State, told a briefing late on Monday that China was producing much more lithium "than the world needs today, by far".
"That is an intentional response by the People's Republic of China to what we are trying to do" with the Inflation Reduction Act - the largest climate and energy investment package in U.S. history valued at over $400 billion, Fernandez said, adding:"They engage in predatory pricing... (they) lower the price until competition disappears. That is what is happening."China accounts for about two-thirds of the world's lithium chemical output, which is mainly used in battery technologies including for electric cars. Prices of lithium have fallen more than 80% in the past year largely due to overproduction from China and a drop in demand for electric vehicles.
However, the price collapse is also affecting China as it has forced Chinese companies like battery giant CATL (300750.SZ), opens new tab to suspend production at certain mines.JOB CUTSEurope aims to reduce its dependence on imports from China and other countries of lithium and other materials essential to the green transition.Fernandez said the low price "constrains our ability to diversify our supply chains on a broad, global scale" and also hurts countries such as Portugal that need investment to develop these industries.