Local NEV battery materials producers unaffected by Sichuan earthquake

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

LCO battery demand from the global consumer electronics markets is estimated to fall 2% to 31.92GWh in 2019

Dingsheng Lithium plans to build a lithium salt project with capacity of 50,000 mt/year

Demand for battery-grade lithium metal from bike sharing services and electronic cigarette has decreased year on year

Catamarca signed an agreement to support FMC’s plan of expanding lithium output in the region.