SMM Analysis of China December Lithium Carbonate Production and January Forecast

In December, domestic lithium carbonate production continued to rise rapidly, up 9% MoM and 59% YoY. Driven by strong downstream demand maintaining high production levels and the presence of certain arbitrage opportunities in the futures market, upstream lithium chemical plants showed sustained enthusiasm for production.

By raw material type, lithium carbonate production derived from spodumene in December increased significantly, up 16% MoM. The growth was partly driven by higher production at some lithium chemical plants due to profits from the delivery market and partly by the switch from lithium hydroxide production to lithium carbonate, as well as the ramp-up of newly commissioned production lines. Lithium carbonate production derived from lepidolite also continued to climb, up 12% MoM. The increase was supported not only by sustained growth driven by strong demand but also by additional output from newly resumed smelters. Lithium carbonate production derived from salt lake decreased due to weather impacts, down 14% MoM. Meanwhile, a leading battery cell manufacturer maintained a high level of orders under tolling agreements for recycled batteries, keeping lithium carbonate production from recycling stable, up 1% MoM.

Entering January 2025, the Chinese traditional festival—Chinese New Year—is approaching. On one hand, some upstream lithium chemical plants are planning maintenance around the holiday, which is expected to reduce production. On the other hand, downstream demand has shown signs of weakening, which is also affecting production sentiment at upstream lithium chemical plants. Domestic lithium carbonate production in January 2025 is expected to decrease by 9% MoM.