Shares of Lithium Americas Corp. (LAC) soared 7.16% on Wednesday, as the lithium mining company benefited from a broad rally in the lithium sector following reports of a supply disruption at a major producer.
The surge in lithium stocks was triggered by news that Contemporary Amperex Technology Co. Limited (CATL), the world's largest battery producer, had suspended operations at a lithium mine in China. The mine, which accounts for 5-6% of global lithium supply, was a significant source of the metal, particularly in the form of low-grade ore lepidolite.
The supply disruption from CATL's mine suspension sparked concerns about a potential lithium shortage, fueling a rally in lithium prices and shares of lithium mining companies. Analysts at Citi raised their near-term lithium price forecast, citing expectations that investors would rush to cover their short positions in the commodity.
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