[SMM Analysis] Cobalt Sulfate production in China was flat in November 2018 compared with the previous month.

As of January 26, China battery-grade lithium carbonate offers continued to rise, according to SMM prices.

The average monthly price of battery-grade lithium carbonate was 236,478 yuan/mt in December 2021, up 20% on the month. The prices are likely to rise further as the downstream restocking extends.

China’s rare earth mining and smelting/separation quotas stood at 168,000 mt and 162,000 mt respectively in 2021, according to the Ministry of Natural Resources (MNR) and the Ministry of Industry and Information Technology (MIIT).

Cobalt and lithium were undoubtedly the topic of the year which featured recovery and growth. As the shortage of upstream minerals drove up the prices of cobalt and lithium salt, many midstream and downstream enterprises have embarked on the road of competing with upstream miners for cobalt and lithium resources in order to control their costs.

The latest SMM survey showed that 35 steel makers in China plan to produce a total of 9.34 million mt of hot-rolled coils and plates in December, up 366,300 mt or 4% from the realised output in November.

Baosteel Desheng, a subsidiary of China Baowu Iron and Steel Group, invested 13.6 billion yuan to build a fine stainless steel green industry base in 2018, and the project will be fully put into operation next year.

The market sentiment of lithium ore increased further. SQM, the world's second-largest lithium miner, predicted that the average price of lithium will rise by nearly 50% compared to Q3 in Q4.

The new production capacity of lithium resources will be put into operation intensively after 2022-2023, and the production may be lower than expected. It is expected that there will still be a supply shortage of 24,000 mt LCE in 2022.

Yunnan Provincial Development and Reform Commission announced on September 11 that the average monthly output of local industrial silicon companies should not exceed 10% of the August output from September to December.

Most of the companies that extract lithium from salt lakes in South America sell lithium products mainly through long-term contract. And selling prices were low for orders executed in the first half of 2021, most of which were signed at the end of 2020, according to CITIC Securities.