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Fears of a tighter lithium supply from China are driving up prices.
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Sigma Lithium could greatly benefit as it adjusts sales volumes to capitalize on higher prices.
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The lithium stock is up only about 20% in 2025 so far despite its recent rally.
Shared of Sigma Lithium (NASDAQ: SGML) rocketed 16.9% higher Monday morning, hitting 52-week highs of $14.25 per share. With today’s gain, the lithium stock has now soared a jaw-dropping 200% in just six months.
What’s unfolding in the global lithium markets right now represents a massive tailwind for Sigma Lithium, which is why investors are piling on to the stock that’s still up only 20% in 2025.
Lithium prices are on fire, with prices of lithium carbonate futures hitting 18-month highs of $99,000 yuan, or roughly $14,060 per metric ton, on Dec. 22.
China holds the world’s largest lithium reserves and is also the largest lithium-consuming nation in the world. It is also one of the leading lithium producers, so there’s bound to be a stir when any development in the nation signals a potential supply squeeze. That’s what’s happening right now, what with Yichun, also known as the “Lithium Capital of Asia”, announcing plans to cancel 27 mining permits in 2026.
To be sure, the licenses already expired between 2010 and 2024. The mines, however, were registered for materials such as ceramic clay and limestone although they extracted lithium historically. Following the recent reclassification of lithium as an independent mineral, the Chinese government is revoking these outdated permits, effectively blocking the mines from mining lithium again.
Battery giant, CATL, for instance, has failed to extend the expired permit for its Jianxiawo lithium mine. Production at the mine, which supplies an estimated 3% of global lithium, has remained suspended since August 2025.
Meanwhile, registrations of new energy vehicles (including battery electric vehicles (EVs), plug-in hybrids, and fuel-cell vehicles) jumped nearly 21% in November, supporting the demand for lithium-ion batteries.
Every rise in lithium prices is a windfall for Sigma Lithium. While the company generates revenue from mining and selling lithium, it strategically manages sales volumes, holding back some of its sales during price dips and ramping up as prices recover.
Higher lithium prices should also boost Sigma Lithium’s cash flows, enabling it to repay debt and strengthen its balance sheet.
