【SMM Analysis】Lithium hydroxide production showed a significant increase in March, with a growth rate of over 25% MoM.

According to SMM, the resumption of lithium hydroxide production after the holiday this month showed a significant increase, with a growth rate of over 25%, but a YoY decrease of over 5%. From the raw material perspective, the smelting sector saw an increase of over 25%, basically flat YoY. Most producers resumed normal production after the holiday, resulting in a considerable supply increase. However, due to the slower growth in downstream demand for lithium hydroxide and the generally high inventory levels in the smelting sector, some companies' flexible production lines leaned towards lithium carbonate production. Consequently, the production recovery fell short of previous expectations, with a slight decrease compared to the normal output level before the holiday. The causticisation sector's production increased by over 30% MoM, but decreased by nearly half YoY. A few companies saw a slight increase in production after the holiday, coupled with the ramp-up of new production lines, resulting in a noticeable MoM increase. However, the overall operating rate remained low, contributing limitedly to the overall supply level. Due to the high concentration of lithium hydroxide supply, the production of top-tier enterprises remained relatively stable recently. Therefore, the April production is expected to be basically flat with the March forecast, with a YoY decrease of nearly 30%.