Lithium prices and stocks surged after Contemporary Amperex Technology Co. Ltd. closed a major mine in China due to overcapacity concerns, leading to speculation of more suspensions by Beijing. Tianqi Lithium Corp. and Ganfeng Lithium Group Co. jumped in Hong Kong, while US producer Albemarle Corp. and others saw significant gains.

The CATL mine closure, the largest in China’s lithium hub of Yichun, accounts for about 6% of global output, sparking a sharp rise in lithium prices. Analysts predict a significant increase in the near-term lithium price as the closure may lead to tighter capacity in the lithium supply chain.

CATL confirmed the Jianxiawo mine closure and plans to renew its permit, impacting its shares positively. Analysts suggest the anti-involution campaign in China may lead to tighter regulation in the lithium sector, potentially benefiting the industry in the long run.

Australian lithium producers like PLS Ltd. and Liontown Resources Ltd. also saw their shares soar, signaling a broader impact on the industry. Traders are monitoring other mining curbs in Yichun city, a battery-metals hub in China, which could further impact lithium prices.

The closure of the CATL mine may not change the oversupply structure in the lithium market, but further disruptions in Yichun could push prices even higher. Analysts are closely watching for any extended production disruptions in the region, which could have a significant impact on the lithium market in the coming months.

Read more at Yahoo Finance: Lithium Market Soars as CATL Shuts One of World’s Top Mines