China's new energy vehicle market demand has grown rapidly, leading to stronger demand for ternary and iron-lithium materials. The global supply of nickel and cobalt raw materials is tightening, and the increase in downstream demand will support the rise of lithium prices in 2021.

Automobile sales have shown a gradual recovery trend since April. China automobile production and sales have achieved year-on-year growth for eight consecutive months as of November.

China's new energy vehicle market demand has grown rapidly, leading to stronger demand for ternary and iron-lithium materials. The global supply of nickel and cobalt raw materials is tightening, and the increase in downstream demand will support the rise of lithium prices in 2021, said SMM’s senior cobalt-lithium analyst Miranda Mei.

According to SMM survey, cobalt prices trended lower in September-October but have stabilised recently. Inquiries for cobalt raw materials and trades rose. A small number of producers reported that they planned to delay the arrivals of raw materials at ports from September to early October, and the overall arrivals are expected to rise from October to November.

At present, the capacity of lithium carbonate (industrial grade and battery grade) smelters in Sichuan accounts for 20% of the China's total capacity, and the capacity of lithium hydroxide accounts for 37% of the country's total. Expansion is in progress.

In this three part webinar series, our analysts will share their views on the trending topics across the China domestic ferrous, non-ferrous and new energy sectors during this unprecedented period.

China has taken a leading position in global new energy industry despite source starvation; mining and battery sectors are highly concentrated in the global new energy value chain, while smelters and material producers, who are in the middle of the value chain, are less concentrated and suffer from thin gross profits and overcapacity, said Racket Hu, vice president of SMM.

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..