Australian lithium stocks rise on reports of Chinese mine closure

Investing.com-- Shares of major Australian lithium miners rose on Monday amid unconfirmed reports that Chinese battery maker CATL had closed a major lithium mine in the mainland, pointing to potentially tighter supplies. 

Pilbara Minerals Ltd (ASX:PLS), Piedmont Lithium Ltd (ASX:PLL), Liontown Resources Ltd (ASX:LTR), Arcadium Lithium PLC DRC (ASX:LTM) and Mineral Resources Ltd (ASX:MIN) added between 0.8% and 5%, extending gains after a positive session on Friday.

Australian investment bank Barrenjoey said in an unconfirmed report that Contemporary Amperex Technology Co Ltd (SZ:300750), or CATL, had shut its Jianxiawo lithium mine before the Lunar New Year holiday, amid high production costs and falling lithium prices.

The shutdown could potentially take out about 3% of global lithium supply- presenting much tighter market conditions and potentially helping spur some gains in lithium prices. CATL is one of the largest lithium producers in the world

Lithium prices slumped some 80% over the past year amid weakening demand for electric vehicles, which in turn battered the margins of major lithium producers. Australian lithium stocks had tracked the declines in the prices of the battery-making material.

Still, Australian lithium stocks were sitting on some strong gains from Friday, after Albemarle Corp (NYSE:ALB)- the world’s largest lithium producer- clocked strong earnings and said it expected lithium demand to at least triple by 2030, in turn boosting prices.