[SMM Analysis] Lithium hydroxide production remained stable and relatively strong on a MoM basis in May, and the expected flat trend in June remains unchanged.

According to SMM data, the production of lithium hydroxide remained basically stable MoM this month, but decreased by over 20% YoY. From the perspective of raw material classification, most production lines of smelting enterprises operated relatively stable. However, against the backdrop of the continuous and significant decline in lithium carbonate prices, some enterprises have made partial adjustments to the production structure of their flexible production lines, resulting in changes to the production ratio of carbon-hydrogen structures. On the causticisation side, after several months of capacity ramp-up, the production output and quality of some enterprises have stabilized, contributing a certain increment to the overall output. This has led to a MoM increase of approximately 30% in causticisation production, although it still decreased by around 20% YoY. Looking ahead to June, some smelting enterprises are expected to halt production for technological transformation, while the production increment from the capacity ramp-up of new production lines in some enterprises will supplement the overall production. Overall, after offsetting the increases and decreases, the overall production remained basically flat MoM, with a YoY decrease of approximately 25%.