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.

Prices of industrial-grade lithium carbonate eased on Monday March 30 after held firm for most of March, showed SMM assessments. Battery-grade lithium carbonate prices, however, are expected to face..

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. 

Raw materials cost advantages and cash-in inclination drove some of the cobalt salt producers in China to reduce offers and destock last week, as more investors were on the sidelines given the fulfilment of pre-holiday orders and slow increase in new orders.  Sluggish demand in the downstream power battery market saw lithium salts consumers cautious about restocking, and demand from the industry sectors remained subdued. SMM expects limited upside momentum in near-term prices of lithium carbonate as lithium salts supply normalises in March and a smaller price spread between industrial- and battery- grade lithium carbonate squeezed the profit margins at refining plants.

China's imports of cobalt raw materials, including ore and intermediate products, came in at 8,000 mt in January, down 25% from December, showed the latest customs data. Imports in 2019 were 24%...

With the resumption of logistics and the return of workers, downstream production and its demand for upstream raw materials are expected to normalise in the first half of March.

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

Transactions increased in the cobalt and lithium chain last week as more producers returned from holidays. Downstream stockpiling on a bullish outlook for prices extended rises in cobalt salts, while

Transportation activity in coastal provinces has started to return to near normal levels in recent days, but that inland remains more restricted