SMM Analysis On China September Lithium Hydroxide Production And October Forecast

According to SMM statistics, China's lithium hydroxide production in September 2024 slightly decreased MoM by about 1%, while it was up approximately 30% YoY.

Supply side, regarding raw material types, lithium hydroxide from the smelting side decreased about 1% MoM and increased 44% YoY in September, while production from the causticisation side fell about 8% MoM and dropped approximately 48% YoY. On the smelting side, the changes in September mainly resulted from some smelters gradually resuming production after maintenance in August and others adjusting shipment pace due to increased orders in October and holiday adjustments. Additionally, delays in new production lines due to weather and weak market demand led to a reduction in switch from lithium hydroxide production to lithium carbonate and outsourcing orders. Overall, the total from the smelting side saw a slight decrease. Regarding causticisation, aside from a small increase in orders for some companies in October, other companies experienced a reduction in overall causticisation volume due to new production lines not meeting expectations and product quality issues, maintaining a relatively low operating rate.

Demand side, in September, some major ternary cathode manufacturers saw a reduction in orders, combined with decreased production from small and medium-sized manufacturers, leading to a significant overall production decline of 6%-8%. Among these, production of 8-series and above decreased by 10%-15%, mainly due to a downward trend in demand for ternary materials after increases in July and August, driven by changes in end-use demand.

In terms of exports, due to the peak season and inventory adjustments, lithium hydroxide exports in August increased by about 15%. Based on recent research on order negotiation progress and changes, exports are expected to decline again in September-October. Considering the slight decrease in upstream production and weakened downstream demand, lithium hydroxide is expected to be in a slight surplus in September-October.

Looking at October, China's lithium hydroxide production is expected to remain relatively stable compared to September, mainly because most manufacturers produce according to orders, maintaining a stable production state.