Lithium prices plunge in China after exchange curbs speculation and CATL mine restart talk

Lithium carbonate futures in China dropped 9% after the Guangzhou Futures Exchange moved to curb speculative trading and reports surfaced that CATL may restart output at its Jianxiawo mine, raising supply expectations.

Lithium prices in China fell sharply on Friday, snapping a short-lived rally, after regulators stepped in to cool speculative trading and fresh supply signals emerged from a key domestic producer. The most-active lithium carbonate futures contract on the Guangzhou Futures Exchange (GFEX) closed down 9% at 91,020 yuan per tonne, hitting its daily lower limit and erasing most gains made earlier in the week.

The pullback came a day after the same contract touched 102,500 yuan per tonne, its highest level since June 2024, underscoring how quickly sentiment can turn in a market still struggling to find equilibrium.

Guangzhou Futures Exchange tightens rules to curb speculative trading

GFEX announced on Thursday that it will raise transaction fees for certain lithium carbonate futures from November 24 and introduce limits on daily open positions for traders who are not futures company members.

Analysts interpreted the move as a direct attempt to curb speculative activity that had helped fuel the recent upswing. The regulatory shift was widely seen as a key trigger behind Friday’s correction.

Possible CATL mine restart adds supply pressure

Adding to the downward momentum, market participants reacted to reports that CATL, the world’s largest battery maker, may be preparing to restart production at its flagship Jianxiawo lithium mine in Yichun, Jiangxi Province. 

The mine has been offline since early August after its mining licence expired, and CATL has been seeking a renewal while sourcing ore externally. Under current estimates, Jianxiawo can produce just over 46,000 tonnes of lithium carbonate equivalent (LCE) per year, around 3% of projected global supply in 2025—meaning any restart would materially shift short-term supply expectations. 

CATL has not officially confirmed a restart timeline, but separate reporting suggests the company is preparing for a resumption as early as December, pending approvals.

Why the move matters: a market still defined by volatility

China remains the largest lithium chemicals market globally and often sets the tone for international pricing. The episode highlights two realities for the sector:

• Financial regulation can quickly cool price rallies when speculative participation intensifies.
• Supply signals from major Chinese producers still dominate sentiment, especially after months of oversupply concerns.

With demand tied to batteries, EVs and energy storage still expected to grow, the market’s next direction will depend on whether China’s supply growth accelerates faster than consumption—and on how aggressively exchanges police speculative swings.

What to watch next

Investors and producers will be watching closely for:

• confirmation of CATL’s licence renewal and restart schedule,
• the real impact of GFEX’s higher fees and position caps on trading volumes,
• and whether prices stabilize ahead of year-end procurement cycles.

In the near term, lithium prices in China are likely to remain sensitive to both policy interventions and supply announcements from Yichun, one of the country’s most important lithium hubs.