SHANGHAI, Dec 15 (SMM) – China's demand for lithium carbonate stood at 19,936 mt in November, up 9.44% month-on-month and 105.48% year-on-year. In November, output of downstream producers increased, coupled with restocking season in approaching the year end. Lithium carbonate market was in short supply. Ternary demand increased by 11%, of which the 6-series products increased sharply (an increase of 37.84% from the previous month) amid strong demand from the new capacity of Leyou New Energy.
Output of 5-series products and LFP rose 5%, and output of LCO decreased slightly on the month. In December, some battery factories mainly consumed inventories, and the demand for raw materials is expected to fall. Demand for lithium carbonate in December is expected to stand at 20,005 mt, up 0.34% month-on-month and 107.74% from a year ago.
Prices rebounded in Q4 on substantial growth in demand
In 2020, China's total production of lithium carbonate is expected to reach 169,000 mt, an increase of 9.2% year-on-year. COVID-19 has affected domestic lithium carbonate production significantly at the start of 2020. Domestic lithium salt factories have resumed operations since March, and output remained high. However, demand from downstream cathode material plants was weak, resulting in severe stock accumulation in the first half of the year. Accumulated stocks of lithium carbonate increased 59.8% in the first half of 2020, resulting in a price decline.
At the end of Q3, domestic demand for lithium carbonate increased significantly, mainly from series 5 and series 6 ternary materials, and lithium iron phosphate. In the fourth quarter, monthly demand for lithium carbonate reached 18,000 mt, while monthly output stood at 15,000 mt. This combined with slow imports resulted in supply shortages, bolstering prices.
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