How Lithium Carbonate Supply Achieved a MoM Surge of 41% in Mar?

SHANGHAI, Apr 19 (SMM) - China lithium carbonate output surged 41% MoM in March, with battery-grade and industrial-grade lithium carbonate output rising 53% and 30% respectively, according to SMM research. Are there any other factors that fuel a monthly output surge in March other than seasonal recovery of production? SMM believes that the reasons are varied.

In March, China lithium carbonate output totalled 26,178 mt, up 41% MoM and 42% YoY. Among the, the output of battery-grade lithium carbonate stood at 13,932 mt, up 53% MoM and 26% YoY; that of industrial-grade came in at 12,340 mt, up 30% MoM and 66% YoY.

However, the production has been disturbed by raw material supply shortage and hindered imports due to spreading COVID entering April, and some manufacturers plan to carry out short-term production line test. Therefore, the output is April is expected to rise only slightly MoM despite additional output from some new capacities and recovering production of brine lakes. SMM estimates the April output to be 26,784 mt, up 2% MoM.

In terms of raw materials, lithium carbonate produced from spodumene still makes up the majority of the supply, with a proportion of 47%. Some first-tier manufacturers resumed normal production from their annual maintenance, and returned to the level before the maintenance. In terms of raw materials, ore imports maintained MoM growth in the first two months of 2022, but the consumption was relatively low during this period as most manufacturers were under maintenance. The operating rates rebounded in March after production resumption, and output from brine lakes still managed a palpable increase.

Lithium carbonate output from brine lakes took up 19% of the total, as the lakes in Qinghai saw improved production conditions after the weather warmed up after the Spring Festival. And the production also recovered from the long Spring Festival holiday.

Meanwhile, with high lithium salt prices, NMC and LFP recyclers are interest in producing, hence the output from scrap is also rising, with a proportion of 11% in March.