SMM Analysis On China October Lithium Carbonate Production And November Forecast

According to SMM statistics, the total domestic production of lithium carbonate in October still fluctuated at highs, up 4% MoM and up 48% YoY. By raw material, the total production of lithium carbonate from spodumene in October increased by 17% MoM. The main reason for the increase is the rapid ramp-up of production lines switching from lithium hydroxide to lithium carbonate, along with a boost in orders under tolling agreements for some lithium chemical smelters due to favorable downstream demand. The total production of lithium carbonate from lepidolite in October decreased by 21% MoM, mainly due to the shutdown of a major lithium chemical smelter in Jiangxi, while the production of other lepidolite-based lithium chemical smelters remained stable. Therefore, the shutdown of this major smelter significantly impacted the output of lithium carbonate from lepidolite. The total production of lithium carbonate from salt lakes in October decreased by 3% MoM, affected by weather factors, which slightly reduced the operating rate of lithium chemical smelters in the region, leading to a continued decline in the total production of lithium carbonate from salt lakes. The total production of lithium carbonate from recycling in October increased by 3% MoM, continuing the growth momentum from September. The main reasons for the increase in production are the continuous rise in orders under tolling agreements for waste batteries from a major battery plant and the boost in recycled lithium carbonate production due to favorable downstream demand.

Entering November, downstream production schedules far exceed expectations. Driven by sustained favorable downstream demand, most lithium chemical smelters have increased their production schedules. The total domestic production of lithium carbonate is expected to increase by 5%-7% MoM.

Regarding the current spot market for lithium carbonate, the center of spot transaction prices slightly rebounded in October. In the context of high production sentiment downstream, upstream lithium chemical smelters have a strong sentiment to stand firm on quotes. Considering that the cumulative inventory of lithium carbonate remains at a relatively high level, the rebound in spot prices is limited. It is expected that with the continuous rise in demand, the spot price of lithium carbonate will continue to have an upward trend, accompanied by fluctuating rebounds.