China lithium carbonate futures extend rally on supply concerns – ET Auto

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Also supporting prices was a brighter demand outlook following a jump in lithium end-users’ planned production, said Zhang Weixin, an analyst at China Futures.

China’s lithium futures rallied for a sixth day on Wednesday, amid growing supply concerns after Beijing asked a main producing region to limit the environmental impact of lithium exploration.

The most-traded July lithium carbonate contract on the Guangzhou Futures Exchange jumped as much as 7.5% to 112,250 yuan (USD 15,592.66) per metric ton in early trading, the highest since Dec.11.

It closed 3.5% higher at 108,000 yuan. The contract has gained a total of 15% from the closing price of last Tuesday, which was a two-month low.

An environmental inspection led by the central government into the western Qinghai province found “disorderly exploitation” of the lithium brine resources at the Chaidamu Basin, state news agency Xinhua reported on late Tuesday.

The Chaidamu Basin is one of the main brine lake resources regions in the country.

The inspection team urged local government to work on orderly exploitation and development of lithium resources.

Measures taken by producers to address the environmental could slow down their operation and affect production and supply, analysts said.

The environmental inspection in Qinghai, following talks about environmental inspection at the southern Jiangxi province, another main producing region, tightened the supply outlook, analysts at Guotai Jun‘an Futures said.

Also supporting prices was a brighter demand outlook following a jump in lithium end-users’ planned production, said Zhang Weixin, an analyst at China Futures.

Open interest in the contract has increased for five days in a row, suggesting more money flowing into the market.

(USD 1 = 7.1989 Chinese yuan renminbi)

  • Published On Feb 29, 2024 at 02:38 PM IST

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