China lithium hydroxide production to rise 31% in 2020

SHANGHAI, Feb 17 (SMM) – SMM expects China’s production of lithium carbonate to rise 7% from the realised output in 2019, to stand at 170,000 mt in 2020, and production of lithium hydroxide to increase 31% year on year to 100,000 mt, according to the scheduled capacity additions at Chinese producers and the trend of lithium prices. 

Planned new projects of lithium salts in China, especially the capacity additions of lithium hydroxide have attracted much attentions in the market, following bullish news about an absence of a significant cut in 2020 new energy vehicle subsidy in China and accelerated expansion of Tesla’s China market. 

According to SMM statistics, China produced 159,000 mt of lithium carbonate and 76,000 mt of lithium hydroxide in 2019. 

Prices of lithium salts kept declining in the second half of 2019, on the back of sluggish demand from the NEV market and rapid growth in lithium carbonate supply. Smelters in Qinghai ramped up production in the second half of 2019 and reduced costs also triggered greater-than-expected increase in mica output. 

Production growth of lithium hydroxide, meanwhile, was limited last year, as capacity expansion at Yabao Jiangxi plant was offset by the impact of weaker-than-expected demand from high-nickel battery materials.