China lithium carbonate production rose in May and to extend growth into June

According to SMM statistics, domestic lithium carbonate production in May was 62,538 mt, up 18% MoM and 87% YoY. From January to May, cumulative production was 232,221 mt, up 48% YoY. Breakdown by raw materials, most lithium salt plants using spodumene maintained stable production. Except for a few producers with lower output due to production line maintenance, the output of leading lithium salt plants increased significantly in May. Together with the continuous increase in outsourcing contracts received by some lithium salt plants, the production of spodumene-based lithium salt plants rose in May. Regarding lepidolite smelters, although some producers were affected by environmental protection inspections in Jiangxi in May, limiting their production, the output of leading producers and those needing to purchase lithium ore externally increased, leading to a rise in the total lithium carbonate production from lepidolite. As for salt lakes, with the completion of maintenance by leading producers at the end of April, most salt lake producers gradually entered peak production periods in May, resulting in increased output.

Entering June, some smelting and recycling producers are expected to reduce their scheduled production due to factors such as high cost and lower profit. However, with some producers maintaining production ramp-up and the completion of maintenance by certain leading producers, the expected production of lithium carbonate in China for June is 648,680 mt, up 4% MoM. Additionally, market news suggests that the current inspection in Jiangxi will conclude in early June, and preliminary results may impact the actual production of some producers in June. Subsequent inspections this year will remain a key focus for production in the Jiangxi region. On the demand side, we need to keep an eye on the scheduled production of cathode material plants and the inventory management pressure brought by the end-of-June quarterly reports.