According to China Nonferrous Metals News, recent market sentiment for lithium carbonate has fluctuated significantly amid volatile futures prices. This shift stems from multiple factors including production halts at Jiangxi lithium mines, improving macroeconomic conditions, and tightening supply.
Overseas Ore Supply Growth
In Australia, the Pilgangoora mine is expected to accelerate production in Q4 to meet fiscal year output targets. The Kathleen Valley mine still has room for increased production after transitioning to underground operations. Given that high ore prices are boosting mining enthusiasm, Australian mines are expected to maintain an overall upward trend in production.
In Africa, Mali's Goulamina mine was ramping up capacity in October, with output likely to increase further in November and December. The first shipment from Bougouni mine departed for Hainan on October 20, scheduled to arrive in 4-6 weeks. African mines are expected to have some room for near-term capacity growth.
In Brazil, the Mibra Mine has resumed production and may meet its expected capacity, suggesting a modest increase in Brazilian ore output.
Domestically, CATL's Jianxiawo mine faces challenges in resuming operations in the near term. The Yichun tantalum-niobium mine in Jiangxi, previously shut down due to an accident, is gradually restarting, while other mica mines have suspended production. Domestic lithium mica ore output is expected to remain stable in the short term, though sphalerite production may experience seasonal declines as temperatures drop. Considering global mine production trends, lithium ore supply is projected to maintain an upward trajectory in the near term.
Domestic and international lithium salt supply continues to expand
For lithium extraction from pyroxene, raw material supply remains ample. The primary market tension lies between increasing raw material supply and refining capacity reaching its peak. As refining capacity expands further, lithium extraction capacity from pyroxene is expected to grow in tandem. For lithium extraction from mica, constrained by raw material supply, production is projected to remain stable in the short term. For salt lake extraction, over 70,000 tons of new capacity has recently been added, predominantly using the DLE process, which is less affected by falling temperatures. Salt lake lithium production is expected to increase in the short term.
Regarding South American salt lakes, Chile's SQM forecasts a 10% annual increase in lithium salt sales volume, with shipments in the second half of the year rising by over 10,000 tons year-on-year. Previously, Chilean lithium salt shipments declined rather than increased, primarily due to high domestic inventories and reduced external procurement demand. Recently, domestic lithium carbonate destocking has accelerated, and external procurement volumes may rebound. In the short term, Chilean lithium salt imports are expected to increase. Argentina's Tres Quebradas salt lake Phase I project commenced production in September, with a planned annual capacity of 20,000 tons. The Fenix salt lake project has completed routine maintenance, and production capacity will gradually resume. The Centenario Ratones salt lake project will resume production gradually, maintaining Argentina's overall salt lake production growth.
Overall, with increased lithium extraction from pyroxene domestically and rising supply from salt lakes globally, China's lithium carbonate supply will continue to grow in the short term.
Downstream Production Growth Slows
For power battery cells, the slowdown in new energy passenger vehicle sales growth due to policy subsidy reductions limits the boost from commercial vehicle growth alone. With overseas new energy vehicle subsidies also tapering, export growth potential narrows. Considering next year's purchase tax subsidy reductions, automakers anticipate weak vehicle sales in Q1 2024, dampening their willingness to restock battery cells. Power battery cell production may seasonally slow or even decline. Energy storage battery production faces capacity constraints, limiting near-term expansion potential.
From the cathode perspective, as cathode manufacturers have a lead time from material input to shipment, their production scheduling typically reflects future battery cell orders in advance. With energy storage battery cells hitting capacity bottlenecks and production remaining stable, demand for cathode materials continues to be dominated by power battery cells. Therefore, in the short term, the sequential growth rate of cathode material production scheduling may narrow significantly compared to earlier periods, weakening demand-side support for lithium prices.
Looking ahead, short-term lithium carbonate supply and demand are both expanding. However, as demand growth slows and destocking decelerates, fundamental support for lithium prices weakens. Recently, improved macroeconomic sentiment and broad commodity price gains have bolstered lithium carbonate prices. Supply-side disruptions could trigger significant price corrections, with lithium carbonate prices expected to trade in a volatile range in the near term.
As an integrated internet platform providing benchmark prices, on November 11, the benchmark price of lithium carbonate (industrial grade) on SunSirs was 81,433.33 RMB/ton, an increase of 3.82% compared with the beginning of the month (78,433.33 RMB /ton).
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