Exclusive: China's Metals Output in September

SHANGHAI, Oct 12 (SMM) — This is a roundup of China's metals output in September 2021, from an exclusive survey of key producers by SMM analysts.

Copper cathode

The output of copper cathode in September stood at 802,900 mt in September, down 2% on the month and up 0.4% on the year.

The output of smelters in Jiangsu was largely affected by the power rationing policy after the National Day holiday, after the provincial government issued a power rationing notice unexpectedly in September. The total output to be affected will reach 10,000 mt as the capacity utilization rate is less than 30% and some smelters will carry out maintenance. Some smelters in Guangxi are still under maintenance, while the remaining smelters in south China and most smelters in Guangdong have been affected by the power rationing to varying degrees. But the output was less affected.

The output of a smelter in Central China reduced by around 25% due to the arrival of the environmental protection inspection team in September. The market supply has been less affected, and the TCs for domestic copper concentrate have exceeded $65/mt. The supply of raw materials in Xinjiang has only been slightly affected though the transport was disrupted due to the COVID-19 pandemic in Alataw Pass. The prices of sulfuric acid stood high, and most smelters that have not received any power rationing notices maintained high operating rates. The tight supply of copper anode has begun as early as in July, and the will continue though the RCs of blister copper recovered.

In October, it will be some time before the smelters in Guangxi reach full capacity. Several smelters in central China have advanced their maintenance plan on the possible power rationing. The capacity utilisation rates of smelters in Jiangsu stay around 50% under the influence of power rationing; some even reduced the output slightly due to tight supply of copper anode.

The domestic output of copper cathode in October is likely to be 803,000 mt, flat on the month and down 2.3% on the year. The cumulative output in January-October is estimated at 8.29 million mt, up 8.9% year-on-year.

Alumina

SMM data showed that China’s alumina output was 6.20 million mt in September, including 5.99 million mt of metallurgical grade alumina. The daily average output of metallurgical grade alumina was 199,500 mt, up 0.46% on the month and 5.05% on the year. China produced 53.65 million mt of metallurgical grade alumina from January to September, a year-on-year increase of 7.74%. Domestic alumina prices were still rising rapidly in September, stimulating some alumina plants to increase their production. At the same time, the alumina production capacity in Guangxi was less affected by the power rationing. The net imports of alumina is estimated to be around 350,000 mt, and China’s alumina surplus was about 347,000 mt in September. The production of 1 mt of aluminium consumes 1.925 mt of alumina.

As of early October, China's metallurgical grade alumina production capacity was 71.52 million mt/year, with the existing capacity at 88.60 million mt/year. SMM will monitor the impact of the heating season in north China on the local operating capacities. The output of the metallurgical grade alumina is expected to be 6.08 million mt in October (31 days), and the alumina surplus is expected to be around 289,000 mt.

Aluminium

SMM data shows that China's aluminium output was 3.11 million mt in September (30 days), a year-on-year decrease of 0.10%, falling for the first time in the past 21 months. The daily average output was 103,700 mt, down 300 mt on the month. China produced 29.08 million mt of aluminium from January to September, a year-on-year increase of 6.01%. The operating capacities in Inner Mongolia, Yunnan and Guangxi were reduced due to the power shortage and the dual control of energy consumption in late September. At the same time, Zhaofeng, Xinheng, Hengkang, and other plants resumed production. China's operating aluminium capacity stood at 37.45 million mt/year in early October, while the existing capacity stood at 43.75 million mt/year, leaving the operating rate at 85.6%. According to SMM survey, aluminium liquid accounted for 64.6% of China’s total aluminium output in September, a decrease of 2 percentage points from August.

The operating aluminium capacity may continue to decline in October. Qinghai and Ningxia may lower the operating rates, while there will be no production recovery or new capacities to be put into production. The aluminium output is expected to be 3.19 million mt in October, and the daily average output may fall to around 102,900 mt. The power rationing will suppress the consumption in the traditional peak season. The aluminium inventory may rise slightly to 850,000 mt at the end of October.

Primary lead

China produced 261,500 mt of primary lead in September, down 5.62% from August and 2.36% from a year ago. For January-September, the output rose 4.55 % from the same period last year. The production capacities of enterprises involved in the survey stand at 5.48 million mt in total in 2021.

According to SMM research, the output of primary lead increased slightly in September as the power rationing in Henan and the maintenance of some smelters both came to an end. However, Xing'an Silver Lead in Inner Mongolia and Yongning Gold Lead in Henan were still under maintenance. In addition, in the middle and late September, Hunan, Guangdong, Guangxi, and Liaoning all saw intensified power rationing, affecting the production of major enterprises to varying degrees. The decrease of the output in September has exceeded the increase, thus the total output dropped more significantly than in August.

Looking forward, more primary lead smelter will conduct maintenance in October, and most of them are deliverable brands. Thus the output will continue to decline in October. To be more specific, Hunan Shuikoushan, Shandong Hengbang, Jiangxi Copper, and Jiangxi Jinde all conducted maintenance in October with a period of 30-60 days, which will contribute most of the declines in the output of primary lead. On the other hand, in early October, the impact of power rationing in Hunan, Guangdong, Liaoning continued. As the heating season in north China is approaching, the coal supply will tighten further, which is likely to aggravate the problem of power shortage. This factor may continue to affect the production of primary lead smelters in October. The domestic primary lead output in September is expected to drop by nearly 20,000 mt to 244,600 mt in October according to SMM estimate.

Secondary lead

The output of secondary lead across China stood at 368,800 mt in September, down 11.34% on the month and up 32.12% on the year. Meanwhile, the output of secondary refined lead recorded 365,400 mt, down 5.09% on the month and up 35.87% from a year ago. The cumulative output of secondary refined lead in January-September rose 40.11% from last year.

According to SMM research, the output of secondary lead fell more significantly than estimate, mainly caused by the following reasons: 1) The power rationing policy intensified in late September, reducing the output of some smelters in Jiangsu, Hunan and Anhui; 2) Some smelters in Anhui, Guangdong and Hubei carried maintenance amid the arrivals of the environmental protection inspection team; 3) The smelters were not interest in producing as the lead prices plummeted in late September, and the operating losses once expanded to more than 500 yuan/mt, which was the leading cause of the falling output of secondary lead.

In October, the smelters in Guangdong, Hubei and Anhui resumed the production after the National Day holiday as the environmental protection inspection drew to a close. The operating losses of secondary lead also narrowed amid the rally of lead prices entering October. However, the power rationing policy remains in some regions including Anhui and Jiangsu because the power supply is still tight, preventing some smelters from resuming their production. In addition, there are also maintenance plans among smelters including Anhui Tianchang and Jiangxi Xinya.

Generally speaking, the increase and decrease of output among individual smelters will largely be offset by each other. However, the profitability of secondary lead is still uncertain. As such, the output of secondary lead is likely to fall again in October with at a slower pace.

Refined nickel     

The national refined nickel output was about 14,300 mt in September, down about 410 mt or 2.79% month on month. The operating rate stood at 65%. The output reduction was mainly due to the suspension of a smelter in Jilin for maintenance. The production in other regions stood stable.

The refined nickel output is expected to be 14,000 mt in October. The other two domestic smelters do not have maintenance plan.

NPI

The domestic NPI output decreased by 25.22% month on month to 30,100 mt in metal content. The output of high-grade NPI fell by 25.25% to 24,800 mt in metal content, while that of low-grade NPI decreased by 25.09% to 5,400 mt in metal content. The dual control of energy consumption intensified in September. Guangxi maintained the previous power rationing policy. Since mid-September, the NPI plants and the stainless steel plants with NPI facilities in Guangdong, Jiangsu, and Shandong have started to reduce or suspend production. The NPI output shrank significantly. In late September, the NPI and stainless steel production was basically suspended, and the production in Jiangsu was fully halted. Shandong received the notice to curtail the production by 20-30%. The production in Guangxi, Hebei, and Liaoning was unstable.

China is expected to produce 29,000 mt of refined nickel in metal content in October, down 3.8% month on month. The high-grade NPI output is likely to be 24,700 mt in Ni content, and the low-grade NPI output may stand stable at around 5,300 mt in Ni content in October. The work resumption of NPI may be lower than expected in October. The production curtailment will be normalised in Liaoning and Inner Mongolia for the heating season in north China. The production enthusiasm in Shandong is suppressed by the power rationing as well as the soaring auxiliary materials prices. The NPI supply may tighten.

Nickel sulphate

China’s output of nickel sulphate stood at 127,000 mt or 27,900 mt in metal content in September 2021, down 0.94% from the previous month but up 101.2% year on year. Among them, the output of battery-grade nickel sulphate was 26,200 mt in Ni content, and that of electroplating-grade nickel sulphate was 1,700 mt in Ni content. In terms of the raw materials for the nickel sulphate production in September, the self-dissolved nickel briquette and powder accounted for 50%, virgin materials (MHP/MSP/high-grade nickel matte) accounted for about 27%, scrap materials accounted for about 18%, and the remaining was crude nickel sulphate. The output of some plants with nickel sulphate facilities in Hunan, Guangdong, and other regions declined due to the power rationing. However, the decrease in the nickel sulphate production was relatively slight, and the smelter in east China still expanded the production.

The power rationing slowly recovers in Hunan in October, but the power rationing in Guangdong and Zhejiang remains severe. However, the nickel sulphate production is less affected for its low energy consumption. In addition, some new capacities will be put into production in October. The nickel output is expected to rise by 6.87% month on month to 29,800 mt in Ni content, up 75.32% on the year.

Stainless steel

According to SMM survey, the domestic stainless steel output totalled 2.22 million mt in September, a drop of 590,000 mt or 20.97% month on month, and down 19.75% year on year.

China’s output of stainless steel totalled 24.78 million mt from January to September, an increase of 17.1% year on year.

The dual control policy of energy consumption was strengthened in Guangdong and Jiangsu, and the stainless steel production was severely restricted. The overall operating rate fell from 93% in August to 73.7%. The output of the 200 and 300-series products dropped significantly. The 200-series output dropped by 258,200 mt to 575,000 mt on the month, a decrease of about 31%, and the 300-series output fell by 295,000 mt to a new low since February at 1.18 million mt. The output of the 400-series products fell slightly by 37,300 mt to 471,000 mt on the month.

The production in Jiangsu gradually recovers in October amid the easing power rationing, and the operating rates may rebound. However, the operating rates in Fujian and Guangdong are expected to drop further under the strict restrictions.

The stainless steel output is expected to keep falling to 2.19 million mt in October. The 300-series output is likely to drop by 16,000 mt to 1.16 million mt, the 200-series output to be 589,000 mt, and the 400-series output to be 443,000 mt.

Refined zinc

China's refined zinc output stood at 511,900 mt in September, up 3,000 mt or 0.59% on the month but down 6.85% on the year. The output from January to September stood at 4.55 million mt, up 3.06% year on year. The alloy output at domestic refined zinc smelters in SMM’s survey sample was 72,900 mt in September, down 2,539 mt on the month.

SMM survey showed that the increase in domestic refined zinc supply in September was less than expected. The power rationing has intensified since late September in Hunan, Guangxi, and Yunnan. Some secondary zinc smelters in Hunan suspended the production in late September and did not resumed production until after the National Day holiday. The other smelters cut the production by 30-50%. The power rationing in Guangxi extended and intensified in late September. Yunnan was less affected by the power rationing, and the total local refined zinc output increased on the month as expected. A smelters in Inner Mongolia suspended production, the output in Shaanxi increased on the month, and the output in Gansu contributed the major output increment after the production resumption.

The smelters in Hunan gradually resumes production in October. The electricity price rises by 20%, but the local production is not affected. Hunan’s refined zinc output in October is expected to stand flat on the month. A smelter in Guangxi will suspend production in October due to the power rationing, and the output is expected to drop slightly. Some smelters in Yunnan plan to lower their operating rates in the low-water period. A smelter in Inner Mongolia will resume production, and the smelters in Xinjiang will resume the normal production after the power rationing in October. China’s refined zinc output is expected to decrease 8,400 mt to 503,500 mt month on month in October. Smelters in Jiangxi have plans of maintenance in October while other regions have no plans.

Tin

The output of tin in September stood at 13,018 mt, down 4.7% on the month.

The decline in the output was due to the following factors: 1) the output in Yunnan was largely unchanged as some producers resumed production from the previous power rationing, while others reduced the production for fear of rising prices; 2) The output in Inner Mongolia fell in September, and is expected to drop again in October because some manufacturers will carry out rectifications on the requirements of the environmental protection inspection team; 3) The output in Jiangxi has been stable, with the output falling by merely 200 mt due to technical upgrade; on the other hand, though some smelters have received the power rationing notice, the detailed measures have not been specified; 4) The output in Guangxi in October will rise on the month as a large local smelter chose to ensure the supply of tin while suspending the production of zinc in October; 5) The output in the Yangtze River Delta and Pearl River Delta fell in September amid the influence of environmental protection inspection and power rationing.

In October, the output in Yunnan and Jiangxi is likely to remain flat on the month as there is no production ramp-up plans. The output of tin ingot in Guangxi is estimated to increase by around 1,000 mt amid production resumption. The output in other regions may also increase slightly after the power rationing policy eases.

The total domestic output of tin is likely to be 14,650 mt in October according to SMM estimate.

Praseodymium-neodymium oxide

China's output of praseodymium-neodymium (PrNd) oxide in September 2021 stood at 5,814 mt, up 1.6% on the month. The increase was mainly contributed by Sichuan, and the output in other regions was largely unchanged.

The output of PrNd in the rare earth separation plants using light rare earth ore as the raw material in north China was relatively stable in September. Though affected by the power rationing, most companies still maintained the output of PrNd on the sacrifice of relatively cheap lanthanum and cerium products. The rare earth separation plants using medium and heavy rare earth ore as raw materials in south China have found it hard to maintain the output level, as the import of Myanmar ore has been blocked, and the power rationing policy also created negative influences. The output of PrNd oxide in a few enterprises dropped by about one-third. The output of PrNd oxide in rare earth separation plants that use scrap as the main raw material has remained stable. Several companies in Jiangsu have been greatly affected by the power rationing, the output of which has been reduced by nearly 90% in terms of PrNd oxide, coupled with the high production costs. There have also been a few plants in Jiangxi that use scrap as the raw materials recording output loss of around 50%.

With the end of environmental protection inspections, the separation plants in Sichuan and Guangdong have resumed the production. It is expected that the output of PrNd oxide across China will continue to increase month-on-month in October and hit a high of 6,000 mt.

Praseodymium neodymium alloy

The domestic output of praseodymium-neodymium (PrNd) alloy in September 2021 stood at 5614 mt, a slight increase of 2.6% month-on-month mainly due to the expanded production of some plants.

Most metal factories mainly delivered for long-term orders, and they also signed long-term contracts with upstream suppliers. Therefore, the overall output of PrNd alloy has been relatively stable. However, the output of some plants dropped on the month, mainly because they have chosen to reduce the purchase of high-priced raw materials to mitigate the risks as the downstream sector tended to turn away from the high prices.

Due to the impact of power rationing, the prices of auxiliary materials rose, subsequently pushing up the production costs of rare earth products.  Some small and medium-sized magnetic materials companies worry that the subsequent procurement will be more difficult. While the demand for metals has increased slightly recently, but the energy consumption of metal factories is generally higher. On the back of the on-going power rationing, the output of PrNd alloy in October is likely to increase only slightly from September.

Magnesium

According to SMM data, China's magnesium ingot output stood at 54,800 mt in September, down 10.92% month on month and 5.24% on the year. The output totalled 618,900 mt from January to September, a year-on-year increase of 8.13%.

The magnesium ingot output in Shaanxi accounted for 54% of the total national output in the month, followed by Shanxi whose output accounted for 26% of the total, based on SMM research.

The operating rates of magnesium ingot industry stood at 50.41% in September, down 11.22 percentage points month on month and 20.02 percentage points year on year. The significant fall in the operating rates in September was mainly caused by the power rationing policy in the major production areas of magnesium ingot under energy consumption control.

It is reported by leading producers that the average operating rate among magnesium plants has been around 40%. The output in October is likely to be 50,000 mt as the power rationing sustains.

Magnesium alloy

According to SMM data, China's magnesium alloy output stood at 15,400 mt in September, down 15.62% month on month and 23.00% on the year. The output totalled 260,100 mt from January to September, a year-on-year increase of 31.99%.

The operating rate of magnesium alloy industry stood at 28.47% in August, down 15.62 percentage points month on month and 23.12 percentage points year on year. The costs of magnesium alloy plants have risen sharply in September amid the surging prices of magnesium ingots. The magnesium alloy plants were facing the difficulties in the delivery for old orders and the execution of new orders, as the revenue was unable to cover the costs. As such, the operating rates fell as a whole.

According to the salesmen of some magnesium alloy factories, the downstream sector has refused to accept the current high prices of magnesium alloy. If the magnesium prices continue to run at a high level in the future, the decline in the operating rates of the magnesium alloy industry will be more severe under the cost pressures. The output of magnesium alloy is likely to stand at 14,500 mt in October amid slack production activities.

Magnesium powder

The domestic magnesium powder output in September stood at 7,300 mt, up 12.50% on the month. The average operating rate of the magnesium powder industry stood at 41.32% in the month, up 12.50 percentage points from August.

As most domestic steel mills have completed the routine maintenance, the demand for magnesium powder from steel mills increased in September compared with August. At the same time, since the steel mills’ magnesium powder tenders are mostly scheduled at the end of the month, the suppressed downstream demand due to surging magnesium prices in September will affect the output of magnesium powder in October. As such, the output of magnesium powder in October is expected to fall slightly to 7,000 mt.

Titanium dioxide

China's titanium dioxide output stood at 300,000 mt in September, down 0.94% month on month and 0.14% on the year. The output totalled 2.82 million mt from January to September, a year-on-year increase of 12.60%.

The titanium dioxide production was suspended in large scale under the dual control of energy consumption in September, and the overall titanium dioxide output declined.

According to the producers in Guangxi, some areas in Guangxi are still implementing the power rationing, and it is uncertain whether the production restrictions will extend until the end of the year. The operating rates in south and east China are falling amid the recently expanding power rationing. The titanium dioxide output is expected to shrink to 295,000 mt in October.

Industrial silicon

The domestic output of industrial silicon in September stood at 274,000 mt, up 25% on the year but down 0.9% on the month, according to SMM survey.

The producers in Yunnan, Sichuan, Inner Mongolia, Hunan, and Fujian received power rationing notices in September in order to ensure that the annual emission reduction target is fulfilled. As such, the operating rates fell generally 5-23%.However, the overall output only declined slightly in September as the production in Xinjian resumed in the month.

In is expected that the output of industrial silicon in October will rally to around 300,000 mt in October as the production activities in some provinces will resume.

Polysilicon

The output of polysilicon in September stood at 41,700 mt in September, down 3% on the month but up 31% on the year. The output in Jiangsu and Inner Mongolia fell on the power rationing, and the maintenance in Shaanxi and Xinjiang also affected the production activities.

The power rationing policy has constrained the production capacity of polysilicon to some extent. On the other hand, the output in many provinces in Q4 is likely to fall due to the strict energy consumption control. Some polysilicon producers that managed to produce normally have received the notices requiring them to reduce the emissions. But the intensity has not been specified.

The output of polysilicon in October is expected to fall to around 40,000 mt due to the influences of maintenance.

1# Silver

The domestic 1# silver output stood at 1186.544 mt (including 1051.294 mt of mineral silver) in September, down 4.72% from the previous month, which is basically in line with SMM estimate in August. In the United States, Powell recently stated that if the economic progress continues, the Federal Reserve may start to dial back the massive bond purchase soon. While according to the Fed's resolution, it maintains the the federal funds rate and discount rate unchanged at 0%-0.25% and 0.25%, respectively. The economic development and employment market have continued to improve, which weakened the prices of gold and silver. The non-commercial net long positions of gold and silver CFTC are both at a medium-to-high level, and the risks of long positions are gradually accumulating. Therefore, the prices of silver were suppressed to a certain extent in September. The silver prices weakened in September, but the decline has been limited. The volatility in silver prices is likely to stay in the short term, even to a wilder degree under the influence of wide fluctuations in US dollar index. The silver prices may fall again after a great rebound in October.

Although the market volatility has affected the spot trading to some extent, the impact on the production of manufacturers was still relatively small. At present, the output of many manufacturers either increases or decreases due to the end or start of maintenance. The statistical figures of the companies’ output have dropped in September, such as Yunnan Copper, Zhejiang Yadong, Baiyin Nonferrous, Jinlong Copper, Zhongyuan Gold, etc. due to factors of the holiday for the National Day, the power rationing or simply the method of statistics. But the actual production has been normal. Besides, Shaanxi Nonferrous Metals, Yubei Gold and Lead, Mengzi Mining, Gejiu Lianxing and other manufacturers have not resumed production yet; Gejiu Lianxing is expected to resume the production of 1# silver in October. The production of Guiyan Platinum, Jiangxi Longtianyong, Zhejiang Hongda, Shandong Zhaojin have also increased sharply this month to varying degrees due to the gradual resumption of production or other reasons, which also hedges the decline of silver supply from other manufacturers. The output has rose slightly as a result. The current supply of silver-containing materials, including anode mud, is still tight. The pricing coefficient is basically unchanged. The domestic silver output in October is likely to decline mildly on the whole.

Cobalt sulphate 

China’s cobalt sulphate output is estimated at 5,335 mt in metal content in September, a month-on-month decrease of 6% but a year-on-year increase of 37%. Some companies received the power rationing notice in late September. However, the energy consumption of cobalt sulphate production is relatively low, so it was less affected by the restrictions. The output of cobalt sulphate declined slightly. Due to the rising overseas cobalt prices, domestic smelters had higher costs for the cobalt intermediate products. Most smelters are expected to expand production. China’s cobalt sulphate output is expected to stand at 5,608 mt in metal content in October, a month-on-month increase of 5% and year-on-year increase of 37%.

Tricobalt tetraoxide

China’s output of tricobalt tetraoxide stood at 6,226 mt in September, down 14% month on month and 3% year on year. The operating rates dropped in Jiangsu and Hunan in September due to the power rationing. The power rationing in Hunan Province has been slightly eased after the National Day holiday, and the operating rate of the local enterprises has increased slightly. In addition, driven by the increase in the overseas cobalt prices, the domestic prices of tricobalt tetraoxide has been raised, which prompted the enterprises to give priority to the production of tricobalt tetraoxide amid the power rationing. The output of tricobalt tetraoxide in October is expected to increase 5% on the month but decrease 7% on the year to 6,561 mt.

Lithium carbonate

China’s lithium carbonate output was 19,557 mt in September, a month-on-month decrease of 5% but a year-on-year increase of 22%. The power rationing in Jiangsu and Shandong slightly affected the lithium salt production in the end of September. The output of the lithium carbonate extracted from spodumene declined, mainly due to the power rationing and the geological disasters. The output of some new production lines in Hebei increased, but the production lines were still in commissioning. The output of the lithium carbonate extracted from the mica and salt lake was basically unchanged. The lithium carbonate output is expected to stand at 20,625 mt in October, a month-on-month increase of 5% and year-on-year increase of 46% amid the easing power rationing.

Lithium hydroxide

China’s lithium hydroxide output stood at 16,418 mt in September, a month-on-month increase of 4.4% and year-on-year increase of 35%. A large domestic smelter slightly reduced production due to equipment maintenance in September, which further tightened the domestic spot supply. The orders from the high-nickel battery companies decreased slightly. The demand for lithium hydroxide gradually slowed down. Some small and medium scale smelters are raising their production capacities, and the national output of lithium hydroxide is expected to rise by 7.3% month on month and 57% year on year to 17,554 mt in October.

Ternary cathode materials

China produced about 37,435 mt of ternary cathode materials in September, a decrease of 2.4% month on month but an increase of 61% year on year. The power rationing was strict in mid and late September in Hunan, Jiangsu, and Guangdong, where many ternary materials companies lowered their operating rates. Some companies cut the production by over 50%. On the demand side, the leading battery companies maintained low purchase of high-nickel ternary cathode materials. However, the high-nickel ternary cathode materials orders from other battery companies increased. As such, the overall demand for the high-nickel ternary cathode materials stood stable. The demand for the 5 and 6 series products stood high in the motive power markets, but the deliveries for some orders were delayed due to the power rationing. The demand from the motive power market remains high in October, but the production was limited amid in Zhejiang amid the expanding power rationing. The ternary cathode material output is expected to be 35,696 mt in October, down 4.6% on the month, but up 41.7% on the year.

LFP

China produced 35,327 mt of LFP in September, an increase of 8.8% month on month and 84.1% year on year. On the supply side, some plants put the new production lines into operation last month, and the total output increased with the newly included SMM samples. However, the dual control of energy consumption intensified in the second half of September, leading to the short power supply in Hunan and Guangdong, which affected the production and sales of LFP. The LFP output declined in most plants, and some smelters postponed their expansion plans. The growing demand for the new energy vehicles near the fourth quarter boosted the demand for the LFP motive power batteries. Most LFP plants received increasing orders. China is expected to produce 35,697 mt of LFP in October, an increase of 1% month on month and 80.2% year on year.

LMO

China’s LMO output stood at 7,186 mt in September, a month-on-month decrease of 12%, but a year-on-year increase of 9%. On the supply side, the intensifying power rationing across the country caused the shortage of industrial electricity supply. The plants in some areas under strict restrictions suspended production. The costs of some key raw materials such as lithium carbonate and electrolytic manganese dioxide rose sharply, while the increase in the LMO prices was limited, which seriously squeezed the profits of some small and medium sized LMO enterprises. Most of the plants selectively took orders, and the output declined. The LMO demand kept weakening due to the lower cost effectiveness amid the rising prices. The LMO output is expected to be 6,970 mt in October, a month-on-month decrease of 3%, but a year-on-year increase of 3%.