Lithium Carbonate
In March, domestic lithium carbonate production reached 42,792 tons, with a month-on-month increase of 32% and a year-on-year increase of 43%. The cumulative production of domestic lithium carbonate from January to March was 116,790 tons, with a cumulative year-on-year increase of 20.8%. The main factors driving the increase in lithium carbonate production in March were the resumption of production and profit margin recovery after maintenance by lithium salt enterprises. Environmental factors in the Yichun area of Jiangxi Province only slowed down the resumption of production for local small and medium-sized lithium salt enterprises. Among them, the increase in lithium carbonate production by feldspar and mica lithium salt enterprises was more significant, with month-on-month increases of 28.8% and 34.6% respectively; the production efficiency of salt lake enterprises increased synchronously with the warming temperature, with a month-on-month increase in lithium carbonate production of 22.5%; production by recycled lithium salt enterprises was affected by cost inversion in early March, but still increased by 58.5% compared to the previous month.
Entering April, the seasonal maintenance of lithium salt enterprises in the previous period will no longer be a factor, and the impact of environmental factors in the Yichun area of Jiangxi Province will gradually weaken. With the expectation of stable production in most lithium salt enterprises, domestic lithium carbonate production is expected to increase again. It is estimated that lithium carbonate production in April will reach 53,135 tons, an increase of 24% compared to March.
Lithium Hydroxide
In March, China's lithium hydroxide production reached 27,375 tons, up 55% compared to the previous month and up 15% year-on-year. Looking at the types of raw materials, in February, the production of lithium hydroxide by smelting method reached 23,850 tons, while the production by causticization method reached 3,525 tons, with a month-on-month increase of 53% and 70% respectively, and a year-on-year increase of 25% and a decrease of 27%.
The causticization method showed a faster month-on-month growth rate, mainly because some causticization enterprises had lower production levels in the previous period due to the continuous inversion of lithium hydroxide and lithium carbonate prices, but after the Spring Festival, the increase in subcontracting orders for some enterprises was significant, leading to a rapid increase in production.
Looking at the cumulative production, from January to March 2024, China's lithium hydroxide production reached 67,517 tons, down 3% compared to the previous month, and the cumulative growth rate narrowed compared to the -12% in February.
From the overall market perspective, there was a significant increase in lithium hydroxide production supply in March. Most smelting companies had gradually resumed production after the Spring Festival, and by March, as lithium carbonate prices rebounded, coupled with the continuous decrease in industry inventory levels of lithium hydroxide, prices also rebounded. Smelting companies generally increased their production and shipments, and in the causticization method sector, there were also cases of increased subcontracting orders and gradual release of new production lines, leading to an increase in production.
By April, it is expected that the commissioning of some new production lines in the industry will continue to drive further production increases for some enterprises. Demand from the downstream high-nickel ternary sector will remain at high levels, but due to the overall moderation in demand growth compared to after the Spring Festival, it will to some extent affect the production pace of some enterprises. It is expected that China's lithium hydroxide production in April will reach 31,480 tons, up 15% compared to the previous month, and up 35% year-on-year.
