SMM Analysis On China September Lithium Carbonate Production And October Forecast

According to SMM statistics, the total domestic production of lithium carbonate in September continued to fluctuate at highs, down 6% MoM and up 38% YoY. By raw material, the total production of lithium carbonate from spodumene decreased by 3% MoM. Most lithium chemical smelters using spodumene maintained high and stable operating rates in September to fulfill long-term contracts and retain market share, while non-integrated smelters kept low operating rates due to cost issues. Additionally, some smelters experienced reduced production due to production line maintenance, leading to a decrease in spodumene-based lithium carbonate production. The total production of lithium carbonate from lepidolite decreased by 22% MoM, with frequent reports of production cuts in Jiangxi. Confirmed significant reductions at major smelters in the region, while other non-integrated smelters maintained low operating rates, resulting in a notable decrease in lepidolite-based lithium carbonate production. The total production of lithium carbonate from salt lakes decreased by 5% MoM, affected by weather conditions that lowered operating rates in the region. In contrast, the total production of recycled lithium carbonate saw a rare increase, up 21% MoM, mainly driven by increased orders for processing waste batteries from a battery maker, boosting production at recycling smelters.

Entering October, driven by continued strong downstream demand, some lithium chemical smelters are expected to slightly increase their production schedules. Additionally, some smelters plan to switch from lithium hydroxide production to lithium carbonate production, leading to a steady rise in domestic lithium carbonate production, expected to increase by 1%-2% MoM.

In the current spot market for lithium carbonate, apart from some material factories facing raw material shortages due to reduced customer supply and needing to restock as needed, other factories have stable long-term orders, limiting the increase in downstream demand for spot lithium carbonate. Upstream smelters continue to stand firm on quotes. Given this supply-demand situation and the current high inventory levels of lithium carbonate, spot prices are expected to have room for a slight increase, showing range-bound fluctuations.