Output Cuts and Halts by Loss-Making Lithium Carbonate Companies to Directly Impact Cost Support

There have been a few small lithium salt factories in China suspending production and large lithium salt factories cutting output, but the reduced production was relatively low compared with the current inventory of lithium salt factories. In 2023, the overall supply is expected to remain in excess. SMM currently expects an excess of about 30,000 mt of LCE. In 2022, lithium carbonate inventories fell 20,000-30,000 mt.

However, the lithium salt inventories of most CAM factories are currently at an extremely low level. After the market demand gradually picks up, the inventory of lithium salt factories can be quickly digested.

SMM understood that downstream buying interest has been low with low acceptable prices even as the costs of traders are high. While sellers are expected to lower spodumene concentrate prices, the price drop can be much smaller than those of lithium salt.