Report: Rongbai Technology to invest in Li-ion battery material project

Precursor production in March was 39,000 mt, up 11.2% month on month. Precursor enterprises basically resumed production in March.

Precursor production in February was 35,000 mt, down 10.8% month on month. Some small producers closed for 7-12 days for CNY and a few producers reduced output, while others basically maintained stable operating rates.

China’s tricobalt tetraoxide output continued to increase in August, but may gradually decline in September due to the low season. Downstream demand is likely to fall sharply in Q4.

Hunan Changyuan Lico, a subsidiary of the state-owned China Minmetals, on April 28 began the construction of an expansion project of cathode materials for electric vehicle lithium batteries.

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.

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.

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