Shares of lithium giant (NYSE: ALB) skyrocketed this morning, surging 16.7% in early morning trading after an industry development triggered a buying frenzy in lithium stocks, which have seen significant value erosion in recent months. Albemarle stock was trading 10% higher as of 10:40 a.m. ET Wednesday.

Albemarle stock is down 40% this year, even after factoring in today's gains. Oversupply concerns amid a global slowdown in the demand for electric vehicles (EV) sent lithium prices tumbling in recent months, with prices now hovering around three-year lows. Industry experts expect lithium supply to jump by nearly 50% this year, driven primarily by China.

So, when a major lithium producer from China reportedly plans to cut lithium production, it is bound to revive investors' hopes. In its latest research report, UBS analyst Sky Han revealed that Contemporary Amperex Technology (CATL) has decided to suspend operations at its Jiangxi lithium mine. UBS said CATL decided to suspend production after a meeting on Sept. 10.

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Source Fool.com