February 6th report: In January, China's lithium hydroxide production reached 22,450 tons, a 10% increase month-on-month and a 6% increase year-on-year.
From the supply side, due to the previous continuous downturn in lithium hydroxide production scheduling, industry inventory showed a clear trend of deep de-stocking, with some smelting companies' inventories returning to relatively normal levels. Under the demand increase from downstream companies' stockpiling before the New Year, individual smelters found their inventories insufficient to fully meet the heightened downstream demand, leading to increased production scheduling to ensure delivery. Additionally, some lithium hydroxide manufacturers had maintenance shutdown plans in February, prompting intentions to produce in advance and stock up. Multiple factors drove lithium hydroxide production to rebound after experiencing a downward trend in scheduling over the previous six months.
From the demand side, with the recent recovery in the supply and demand landscape for lithium hydroxide, its price also gradually stabilized in January. Additionally, as some downstream battery factories gradually shift from mid-low nickel technology routes to mid-high nickel routes, orders for some cathode manufacturers have significantly increased. Moreover, some cathode manufacturers have also advanced their production schedules due to reduced production plans during the subsequent Spring Festival holiday and concentrated overseas pickups, boosting downstream demand for lithium hydroxide and leading to an overall market supply and demand performance that exceeded general expectations. SMM predicts that in February 2024, China's lithium hydroxide production will reach 18,022 tons, a 20% decrease month-on-month and a 26% decrease year-on-year.
If you have any questions regarding the industry data, or the news (e.g. how this can affect your business). Please feel free to reach out to me:
Robin He
SMM Li-ion Battery Materials Department
E: robinhe@smm.cn | T: +86-21-51595884
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