【SMM Analysis】 In July, domestic lithium carbonate total production was 64,960 mt, a MoM decrease of 1.94%.

According to SMM statistics, the total domestic production of lithium carbonate in July (including recycling) was 64,960 mt, down 1.94% MoM and up 43.36% YoY. From January to July, the cumulative domestic production of lithium carbonate was 363,424 mt, up 46.10% YoY. By raw material, the total production of lithium carbonate from spodumene in July was 30,300 mt, up 1.7% MoM. Most spodumene-based lithium salt plants maintained a high and stable operating rate in July. However, some non-integrated spodumene-based lithium salt plants saw a decline in production due to weak downstream demand and the risk of losses. Meanwhile, some leading lithium salt plants completed maintenance and technical upgrades in July, resulting in increased production. Overall, the production of lithium carbonate from spodumene increased by 1.7% MoM in July. The total production of lithium carbonate from lepidolite in July was 15,600 mt, down 12.3% MoM. Although some non-integrated lepidolite-based lithium salt plants experienced losses earlier, they did not significantly reduce production in June due to cash flow considerations. However, continued price declines made it difficult for these plants to sell their products, leading to production cuts. As a result, the production of lithium carbonate from lepidolite decreased by 12.3% MoM in July. The total production of lithium carbonate from salt lakes in July was 13,300 mt, up 2.5% MoM. July remained a peak production period for salt lake-based lithium salt plants, with a high operating rate. Additionally, new lithium salt plants started production in early July, contributing to the total production of lithium carbonate from salt lakes. The total production of recycled lithium carbonate in July was 5,760 mt, up 1.1% MoM. The high prices of recycled scrap led many recycling plants to reduce or halt production. However, some recycling plants saw an increase in production due to stable processing orders and warehouse deliveries in July. Overall, the total production of recycled lithium carbonate increased slightly.

In August, due to the risk of losses, some lithium salt plants are expected to reduce production. Except for salt lake-based lithium salt plants, which are expected to maintain a stable operating rate, the production of other raw material-based plants is likely to be affected. The total domestic production of lithium carbonate in August is expected to be 63,110 mt, down 2.8% MoM.

Currently, downstream material plants have increased their inquiries, but the expected transaction prices are close to market prices and still differ from the psychological expectations of most lithium salt plants. Additionally, material plants' long-term contracts and customer supplies can meet daily production needs, so there is no urgent need to restock, and transaction activities have not significantly increased. On the supply side, lithium salt plants continue to maintain strong price support, but they generally have a bearish outlook for the future, leading to slight price reductions. Some lithium salt plants face the risk of losses and have plans to reduce production. In contrast, material plants' production schedules for August have slightly increased. It is expected that the domestic supply-demand surplus of lithium carbonate may slightly ease, and lithium carbonate prices will continue to trend weakly.