(Reuters) -Shares of lithium producers surged on Monday after Chinese battery giant Contemporary Amperex Technology (CATL) halting output at a major mine raised hopes it would erode the oversupply in a market grappling with soft demand.

Lithium stocks surged on Monday after battery giant Contemporary Amperex Technology (CYATY) suspended operations at a major Chinese mine, fueling speculation of broader project shutdowns by Beijing as it tackles overcapacity across the economy.

Contemporary Amperex Technology Co. Limited (CATL), the world's largest EV battery manufacturer, confirmed it has halted output at its Jianxiawo lithium mine in Jiangxi after its mining permit expired on August 9,