The domestic lithium carbonate production was about 42,000 tons in January, a month-on-month decrease of -5.6% and a year-on-year increase of 15.6%. Looking at the raw material situation, some spodumene lithium salt companies reduced or halted production due to a sluggish market and lower mining and transportation efficiency in the winter, leading to a decrease in production. Nevertheless, this was offset by an increase in subcontracting orders for some lithium salt companies and the factory ramp-up of a few newly commissioned enterprises. However, the majority of small and medium-sized lithium salt companies that purchase lithium mica continued to incur losses and overall reduced their production; most lithium salt companies using recycled materials also chose to reduce or halt production due to ongoing losses.
Entering February, the main factors disrupting lithium carbonate production will be the Spring Festival holidays and concentrated maintenance season in most lithium salt enterprises. Coupled with a depressed market, a significant number of small and medium-sized lithium salt companies started to reduce or halt production in mid to late January, leading to a significant reduction in domestic lithium carbonate production. It is expected that the domestic lithium carbonate production in February will be approximately 32,000 tons, a month-on-month decrease of -22.9%, and a year-on-year increase of 3.9%.
According to feedback from lithium salt companies, most of the factories undergoing maintenance are expected to gradually resume production around the Lantern Festival. However, most small and medium-sized lithium salt companies that purchase lithium ore externally will resume production according to market conditions, implying that domestic lithium carbonate production may face a brief vacuum period in late February. Additionally, Chile's export of lithium carbonate to China in December decreased by -36% to 8,676 tons, which may lead to a decrease in domestic import volume in January. As a result, the domestic supply of lithium carbonate will be reduced, and since most lithium carbonate warehouse receipts are currently held by trading companies, they may have the opportunity to negotiate spot premiums and discounts. However, as we move into March, lithium salt production is expected to gradually recover, and more lithium carbonate warehouse receipts will be canceled, leading to the restoration of market lithium carbonate supply sources.
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