Lithium-ion battery output increases in Sep

Inventory pressure of lithium carbonate, a raw material for digital and power batteries, may continue to mount in April as Chinese lithium salt producers have not yet planned to wind down production. Elevated inventories together with limited downsides in lithium carbonate prices with support from costs, however, may trigger output cut in the second quarter. 

The global widespread of COVID-19 has forced many countries to enforce stringent containment measures which result in a heavy impact on global economic activity. Over the past few months, we saw serious disruption of manpower, transportation and production in China. We are now seeing these scenarios happening around the world.

Primary lead output in China expanded significantly last month, as some large smelters recovered from maintenance and small and medium-sized smelters reopened after the spread of the coronavirus in the country came under control. China’s output of primary lead increased 11.94% from February to 240,000 mt in March, to produce a year-over-year decline of 7.03%. Output in the first three months of 2020 was 6.13% lower than the same period the year before.

The widespread coronavirus has deterred production of NEVs in the European countries, and this may impact the global prospects for NEV production and take a toll on the consumption of raw materials. Last week, bearish sentiment continued to prevail in the cobalt market, which depressed downstream purchases and added to upstream inventory pressure. Sluggish demand reduced prices of battery-grade lithium carbonate, which were underpinned by costs, while fundamentals supported prices of industrial-grade lithium carbonate. 

Industrial activity levels outside of central China continues to improve as workers return from quarantine periods and logistics pressures eased.

The year-over-year increase accelerated from a rise of 6.5% in the first eight months of the year

Stable demand from battery anode will cap the decline in lithium salt prices

Domestic prices of lithium salts will face downward pressure as demand fell

It will invest 1.58 billion yuan to construct a project with capacity of 28,800 mt/year

Daily output of crude steel across China Iron and Steel Association member mills averaged 1.92 million mt during Feb 1-10