[SMM Analysis] Review of Lithium Hydroxide Market in the Final Week of 2024

Last week, lithium hydroxide prices increased slightly by 250 yuan/mt WoW. On the production side, lithium hydroxide production in December dropped 22% MoM. Due to weak overall downstream demand and a high proportion of long-term contracts, spot order demand remained limited, leaving insufficient upward momentum for prices. Coupled with no significant changes in raw material and processing costs and no notable improvement in losses, some enterprises have reduced production in recent months, focusing only on fulfilling long-term contracts. Along with maintenance activities at certain major plants, December production saw a significant decline. On the demand side, ternary cathode material production last month decreased by approximately 7% MoM. With the continued decline in 5-series production, the share of 8-series increased to 40%. Overall performance, driven by end-user expectations of a rush for installations, was better than the same period in previous years.

In the market, upstream lithium chemical plants continued quoting at 70,000 yuan/mt and above. The frequently reported January maintenance and production cuts further supported their firm stance on quotes. Meanwhile, downstream ternary cathode material plants and end-users showed some inquiry activity, but due to the current high price levels and the absence of plans for bulk just-in-time procurement, their purchase willingness remained weak.

Overall, lithium hydroxide prices recently lacked significant upward momentum due to declining downstream demand and the completion of most pre-holiday stockpiling by downstream players. Prices are expected to continue a sideways movement.