Lithium Prices Surge to Yearly Highs as Chinese Miner CATL Suspends Operations

The value of lithium companies have surged in the past week on news that one of China’s major lithium miners has suspended operations.

Lithium prices in China have continued to strengthen with futures reaching their highest point in more than a year high, after reports that Contemporary Amperex Technology (CATL) is suspending production at Jianxiawo in China’s Jiangxi province for up to three months.

The CATL news comes as Beijing has been reportedly investigating overcapacity across a host of industries, including lithium, but also as record growth in the energy storage and EV markets is boosting lithium demand.

Energy Storage Booming

Energy storage is emerging as a key driver of lithium demand and, according to BloombergNEF, the global energy storage market is set to again reach new levels in 2025.

The strategic research provider is forecasting new energy storage additions will grow 35% this year, setting a record for annual power increases of 94 gigawatts (247 gigawatt-hours), excluding pumped hydro.

BloombergNEF said this will be followed by a compound annual growth rate of 14.7% through to 2035, with annual additions reaching 220GW and 972GWh.

EV Sales Growth

The International Energy Agency (IEA) says that despite significant uncertainties, the EV market share remains on course to exceed 40% by 2030 as they become increasingly affordable in more markets.

A recent IEA report found that, following another year of robust growth, global sales of EVs are on track to surpass 20 million in 2025, accounting for more than a quarter of all cars sold worldwide.

“Despite recent economic headwinds that have put pressure on the auto sector, global sales of electric cars have continued to break records as electric models become increasingly affordable,” the report noted.

Global EV sales exceeded 17 million globally in 2024, putting them above 20% market share for the first time, with sales up 35% year-on-year in the first three months of 2025 and all major markets achieving new records for first-quarter sales.

Positive News for Locals

The dramatic jump in lithium prices since early July is positive news for Australia, where a sustained dive in the market due to over-supply has forced a number of miners to either shut down or significantly reduce their operations.

Government data is projecting Australia’s lithium export earnings to increase from $4.6 billion in 2024–25 to $6.6bn in 2026–27, driven by growth in export volumes—particularly lithium hydroxide.

Australian mine output is expected to increase by more than 7% a year out to 2027.