GANFENGLITHIUM (01772) experienced a sharp decline in the pre-market trading session, plummeting 6.19% to HKD 54.6. The significant drop comes in the wake of recent developments in the lithium market and regulatory changes affecting lithium carbonate futures trading.
The primary catalyst for the stock's downward movement appears to be the Guangzhou Futures Exchange's (GFEX) announcement on November 20, which detailed adjustments to trading fees and position limits for lithium carbonate futures contracts. This regulatory shift coincided with a substantial fall in lithium carbonate futures prices, with the main contract plunging over 7% to CNY 92,960 per ton on the morning of November 21.
Adding to the bearish sentiment, Daiwa Capital Markets has expressed a conservative outlook on lithium prices for the coming year. The firm forecasts lithium prices to range between CNY 75,000 and CNY 90,000 per ton, suggesting limited upside potential from current levels. Analysts anticipate weak demand during the upcoming Lunar New Year period and a seasonal slowdown in global electric vehicle sales, factors expected to keep lithium prices subdued in Q4 2023 and Q1 2024. These market dynamics and future projections have likely contributed to the significant sell-off in GANFENGLITHIUM's stock.
