SHANGHAI, Jul 29 (SMM) - China's lithium carbonate output stood at 157,000 mt in the first half year of 2022, a year-on-year increase of 45% and up 31% compared to the second half year of 2021. The increased output mainly comes from the following enterprises: Yongxing New Energy, Zhicun Lithium, Jiuling New Energy and Yongshan Lithium.
In January and February, the mainstream lithium salt plants in Sichuan and Jiangxi Provinces underwent maintenance in turn, which, combined with the Spring Festival holiday, reduced the operating rate and limited the production of enterprises. At the same time, some smelters suspended the production due to ore shortages. The production was reduced in Qinghai because that during January to March each year, the raw materials were frozen in the region, increasing the difficulty in production. As a result, the output of lithium extracted from salt lakes declined. In March, the overall output increased significantly month-on-month as smelters finished maintenance and resumed the production gradually as well as some smelters upgraded equipment to increase their production capacity. In April and May, the pandemic in Shanghai affected the exports of lithium carbonate. The backlog of lithium carbonate in Shanghai port led to a decrease in the imports. However, the domestic smelters was concentrated in Jiangxi and Sichuan Provinces where the pandemic was under control, so the overall domestic output still rose slightly. In June, the overall output continued to grow with the annual production peak of salt lake lithium extraction in Qinghai and the ramp-up of new production lines.
China's lithium hydroxide production in the first half year of 2022 totalled 107,000 mt, up 32% year-on-year and 11% higher than the second half year of 2021. The increased production mainly comes from the following enterprises: Tianyi Lithium, Rongjie Lithium and Zhiyuan Lithium.
At the beginning of the year, large smelters in Jiangxi and Sichuan closed for maintenance during Spring Festival, and some major manufacturers of lithium hydroxide halved their output in February due to maintenance. After the Spring Festival, most enterprises resumed the production smoothly in March, and in particular the output increased rapidly in Sichuan. At the same time, some enterprises ramped up their production capacity, so the overall output has risen significantly on the month. From April to May, smelting manufacturers continued to ramp up capacity, while due to the falling prices of lithium carbonate, some causticising plants purchased lithium carbonate more frequently and increased their output. In June, as domestic large smelters started the annual maintenance, some manufacturers were under maintenance in turn; the production of lithium hydroxide increased slightly since causticising plants had a stable supply of raw materials from overseas imported concentrates.
According to SMM statistics, China's top five lithium carbonate manufacturers accounted for 43% of the total market share, a slight decline compared to the first half year of 2021. It is worth noting that the competition in the lithium carbonate market has further intensified. In first half of 2022, Zhicun Lithium's lithium carbonate production ranked first, accounting for about 10% of the total domestic production. Besides Zhicun Lithium, Tianqi Lithium, Lanke Lithium, Zhiyuan Lithium and Ganfeng Lithium maintained high operating rates and ranked among the top five in terms of market share. As the prices of lithium carbonate increase, more enterprises have started to take part in the market and changed the marke dynamics. The market share of leading companies has gradually been squeezed: the market share of CR5 has dropped by about 13% compared with last year.
SMM statistics show that China's top five lithium hydroxide manufacturers account for 62% of the market share, higher than that of the top five lithium carbonate manufacturers. In particular, Ganfeng Lithium still occupies the leading position in the industry, accounting for 24% of the market share.