Trading activity in Chinese lithium futures has surged, with record volumes in July on the Guangzhou Futures Exchange. Open interest hit a record too, as speculation around supply uncertainty swirls, leading to wild price swings. Prices rose over 30% in August, reflecting heightened levels of volatility.

Battery giant Contemporary Amperex Technology Co. Ltd. halted a major mine in Yichun, Jiangxi province, adding to concerns of tighter scrutiny from Beijing. The “anti-involution” theme in China’s financial markets may have also fueled speculative trading in lithium futures. Trading activity has been volatile, with daily limits frequently hit.

Guangzhou contracts for lithium carbonate have seen increased activity, with the bourse implementing measures to rein in speculation. Citigroup Inc. analysts predict continued price volatility due to policy uncertainty around supply cuts. The surge in futures activity reflects the market’s sensitivity to news flow and uncertainty over supply outlook in major production hubs.

Read more at Yahoo Finance: Chinese Lithium Trading Spikes Amid Volatility, Supply Concerns