Supply of industrial-grade lithium carbonate has begun to decline since October, while demand for LFP and LMO has increased rapidly, resulting in supply deficit and lifting its prices significantly. Chinese importers have signed large volume of orders, but imported cargoes will not arrive until two months.

Shenzhen-listed Dazhi Technology said Wednesday that it plans to issue no more than 31.68 million new ordinary shares to raise approximately 1.07 billion yuan to build a lithium-ion power battery project in South-central China’s Hunan province.

Domestic demand for raw materials increased following the return of cobalt salt producers in March, and this led to the rebound in imports. It is understood that cobalt raw materials delivery to smelters resumed at the beginning of March and more than 80% of producers restarted operations by end-March. 

Northwest China’s Gansu province is mulling a plan to encourage local companies to stockpile up to 436,000 mt of nonferrous metals for at least seven months to support the market which has been hit by the COVID-19 pandemic crisis.

Demand for lithium iron phosphate (LFP) batteries in the new energy vehicle market, which enjoy more cost advantage as compared to high-nickel ternary batteries, will likely increase with support from the latest 2020 NEV subsidy policy, under which only passenger cars costing less than 300,000 yuan/unit will receive subsidies. 

Demand for Chinese lithium cobalt oxide (LCO), a type of cathode material used to produce lithium batteries, could fall 40% in May, SMM estimates. This is against the backdrop of the coronavirus crisis overseas, which has led to steep declines in China’s export orders and prompted domestic smartphone makers to mull output cut.

Demand remained subdued in China’s cobalt market last week while a handful of consumers purchased as required. The market may find some near-term support from the extended national lockdown of South Africa, which will last until end April and aim to curb the COVID-19 pandemic.  

China's installed capacity of batteries to power electric vehicles surged 363.2% in March from the month before to 2.86GWh, showed data from the China Automobile Power Battery Industry Innovation Alliance (CAPBIIA), suggesting the country’s EV sector is recovering from the coronavirus pandemic outbreak.

At present, the energy density of LFP battery cells mass-produced by Guoxuan High-Tech has exceeded 190Wh/kg, with the battery system energy density above 140 Wh/kg

Producers of cobalt and lithium products have recovered successively in Jiangxi, Jiangsu and Sichuan as of February 20. Smelters in Hubei, the epicentre of the coronavirus outbreak, remain suspended.