[SMM Analysis] Downstream Demand Stable but Raw Material Performance Remains Poor, Precursor Prices Decline

According to the National Bureau of Statistics, national sulfuric acid (100% basis) output in June 2026 reached approximately 7.923 million tons (vs. 8.365 million in May, 8.948 million in April, and 9.637 million in March, showing a month‑on‑month decline). The year‑on‑year change for the month was about ‑10%. For the first half of the year (January–June), cumulative production totaled roughly 52.223 million tons, a year‑on‑year decrease of about ‑0.1% (down from +1.9% in the January–May period, mainly due to the sharp 10% drop in June). Production remains heavily concentrated in smelting and phosphate‑fertilizer provinces such as Yunnan, Inner Mongolia, Guangxi, Anhui, Henan, and Shandong—with Yunnan ranking first at about 1.24 million tons per month. Smelter acid (by‑product from copper/zinc processing) forms the supply backbone, while acid for phosphate fertilizer drives the bulk of demand.

Zimbabwe's lithium producers have committed approximately $1.45 billion to local beneficiation infrastructure, Lithium Producers Association Chairman Innocent Rukweza said at the Mine Entra Beneficiation and Value Addition Symposium in Bulawayo. The industry is seeking government flexibility on the pending unbeneficiated spodumene export restriction, citing limited sulphate-plant readiness. Of seven major producers, only Prospect Lithium Zimbabwe's Huayou-linked Arcadia plant ($400 million) has commissioned sulphate conversion, exporting Africa's first locally produced lithium sulphate in April 2026. Sinomine's $500 million Bikita plant remains under construction; Kamativi Mining Company's $200 million-plus project is at investment stage; a fourth facility targets end-2027. Concentrate exports move CIF China via Beira and Durban, with grid instability and border/rail congestion at Machipanda, Beitbridge-Durban and Maputo adding risk to export timelines. The industry's effective tax burden is estimated at ~40% of sales revenue (10% export tax, 7% royalties, 3% community levy, 1% MMCZ fee, 15.5% VAT), which the association has called SMM View: Zimbabwe's beneficiation drive remains a one-plant story Arcadia commissioned, three others still at construction or investment stage. Grid reliability and corridor congestion, not capital alone, will determine how fast that gap closes.

Australian lithium developer Mandrake Resources has commenced swabbing activities at its Evelyn Chambers #1 well in Utah's Paradox Basin, targeting bulk brine production from the Mississippian Leadville Formation reservoir. Brine is being extracted from existing perforations within the Leadville Formation originally installed for oil and gas production, now depleted, and not optimised for the modelled high-grade lithium zones within the formation. Mandrake estimates a purpose-drilled lithium brine well, offering more selective zone targeting, would cost approximately $4-million. Production testing will include flow and pressure testing, staged chemical analysis of brine over defined pumping periods, and reservoir deliverability assessment, with results feeding directly into commercial modelling and scoping studies. The work is partly funded by a $1-million federal grant awarded by the US Department of Energy to the Paradox Basin Lithium Group. Bulk brine will be transferred into storage totes for initial supply to Electroflow Technologies and several other direct lithium extraction (DLE) providers. Electroflow's DLE demonstration plant is set to receive 10,000 litres of lithium brine, which will undergo technical and commercial appraisal covering purity, recovery, and processing cost data. Electroflow's stated end-use targets are battery-grade lithium carbonate and lithium iron phosphate. Mandrake noted that improved sentiment in the global lithium market has renewed investor and corporate interest in the sector, with several opportunities currently under assessment for the Utah project's development. SMM Outlook: The 10,000-litre initial supply volume to Electroflow is a modest first tranche relative to what a purpose-drilled well could ultimately deliver, but it's sufficient to generate the purity/recovery benchmarks needed before capital is committed to the $4-million dedicated well option. Reservoir deliverability data from the current swabbing campaign rather than the DLE appraisal itself will likely be the binding constraint on how quickly Mandrake can scale supply to multiple DLE partners.