Weak orders to lower lithium manganese oxide output by 2.4% in Q4

Xiangtan Electrochemical Technology announced that its subsidiary, Jingxi Lijin New Materials Co., Ltd., has basically completed construction of the main part of its 20,000 mt/year spinel-type LMO battery material project.

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. 

Prices of spot manganese have not received significant support from the resumption of downstream demand and have extended their slide this week. SMM expects the prices will remain weak with pressure from elevated inventories of #200 cold- and hot- rolled stainless steel.

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

Daily output of electrolytic manganese across the region is expected to recover to 100-200 mt in the early stage of the resumption

Muted trades in the spot market grew bearish sentiment about prices

Average spot prices of electrolytic manganese in China’s main production areas fell 325 yuan/mt month the month in Nov