HK Stock Market Move | Long-term supply concerns of lithium ore have intensified as Ganfeng Lithium Group (01772) dropped more than 7% and Tianqi Lithium Corporation (09696) fell nearly 6%.

Lithium mining stocks continued to decline recently. As of the time of publication, Ganfeng Lithium Group (01772) fell by 7.3% to HK$48.9, while Tianqi Lithium Corporation (09696) fell by 5.84% to HK$39. On the news front, on Friday, the main lithium carbonate futures contract on the Shanghai Futures Exchange fell by 5% to 147,440 yuan/ton. From the annual high of 205,000 yuan/ton on May 12, lithium carbonate has dropped by nearly 60,000 yuan/ton in over a month. Contemporary Amperex Technology has regained the land use permit for its salt lake lithium mining project, which may directly impact 10% of domestic lithium salt supply. Chuangyuan Futures analyst Yu Shuo recently explained that the primary reason for the decline in lithium carbonate prices is the fermentation of bearish expectations in future supply. Previous market speculation focused on factors such as delays in the approval of the salt lake lithium mining project and slower-than-expected shipments of overseas lithium mines, which were seen as positive factors; but recently, the market has turned its attention to factors like resumption of mining operations, concentrated delivery of overseas lithium concentrates in July, and the continuous increase in domestic salt lake and spodumene production capacity, which are leading to expectations of a relaxed market in the future.