[SMM Analysis] In July 2025, SMM's total domestic lithium carbonate production exceeded the 80,000 mt threshold, up 26% YoY

In July 2025, the total monthly production of domestic lithium carbonate exceeded the 80,000 mt mark for the first time, with a 4% MoM increase and a substantial 26% YoY growth. The main drivers of this production growth were the emergence of hedging opportunities in the futures market, prompting lithium chemical plants with previously low operating rates to gradually resume production, leading to a significant rebound in the industry's overall supply capacity.

By raw material type:
- Spodumene saw a significant increase, while lepidolite and salt lake-derived lithium carbonate production dropped back slightly.

Lithium carbonate derived from spodumene:
- Total production in July increased by 14% MoM. On the one hand, production lines at some first- and second-tier lithium chemical plants resumed operations, contributing to the increase; on the other hand, non-integrated lithium chemical plants raised their operating rates driven by profits from futures hedging, pushing production growth.

Lithium carbonate derived from lepidolite:
- Total production decreased by 8% MoM. Mining license issues in Jiangxi Province raised market concerns, but the relevant mines are still maintaining normal production. A leading lithium chemical plant's production in July did not reach the previous peak due to production line maintenance, leading to a certain pullback in overall lepidolite-derived lithium carbonate production.

Lithium carbonate derived from salt lake:
- Total production decreased by 2% MoM, mainly due to production reductions and suspensions at some salt lake enterprises caused by mining issues, while the remaining enterprises maintained stable production under favorable weather conditions.

Lithium carbonate from recycling:
- Total production in July increased by 10% MoM, primarily benefiting from the rise in lithium carbonate prices, which boosted recycling enterprises' production enthusiasm, although the total production volume remained relatively weak.

Outlook for August: Uncertainties persist in Jiangxi mines, but overall production may continue to grow
The lithium carbonate market in August still faces uncertainties regarding mining policies in Jiangxi Province. If extreme situations occur (such as mine shutdowns), relevant lithium chemical plants can still rely on inventories and spot order purchases to maintain a small amount of production. Additionally, with the support of hedging profits from spodumene and the expectation of production ramp-ups at some flexible production lines, the total production of lithium carbonate in August is expected to still have growth potential. Subsequent attention should be paid to the specific implementation of mining policies in Jiangxi Province.