China Li2CO3 supply growth likely to exceed expectations
创建于02.17
The market expectations over China's lithium carbonate spot prices have been quite different post the Chinese New Year holiday when the players were mostly bullish ahead of the holiday, according to Mysteel's survey.
First of all, a few large lithium refineries are said to fully resume the production post the CNY holiday, which will bring additional supply to the spot market. The news is the major cause for the differentiated expectations on follow-up lithium carbonate price moves.
In detail, China's lithium carbonate production is estimated at 64,900 tonnes in February, up 2.2% from 63,500 tonnes in January when domestic refineries and hydrometallurgical plants suspended the production voluntarily for maintenance during the CNY holiday except for a few top-tier ones.
The lithium carbonate production recovery in February is primarily fueled by the said production resumption of Lopal CATL and CATL Wanzai, in addition to Jianxiwo Project likely to restart beyond expectation. In addition, the new production lines of Ganfeng Dazhou and Jiuling Fengcheng are in the ramp-up process. Should the production resumption be advanced as expected, the lithium carbonate supply will be more than originally anticipated in March.
From the perspective of raw material, the spodumene-based refineries are estimated to resume the production and reach full capacity thanks to sufficient raw material stocks. But some tollers have reported slow production resumption due to meagre profits and lack of hedging opportunities. The lithium carbonate production from lepidolite, brine, and scrap is likely to stay flat in February.
In addition, the lithium carbonate imports from Chile are expected to resume as well. According to the customs data of Chile, the country exported 19,120 tonnes lithium carbonate to China in January, up 43.1% MoM and 94.7% YoY. The increase was allowed by the smooth negotiations of long-term orders between suppliers in Chile and domestic consumers.
On the demand end, China's LFP production is estimated at 241,300 tonnes in February, down 7.04% MoM restricted by fewer calendar days and relatively low operating rates of medium and small-sized battery cell manufacturers in the month.
In addition, China recently introduced the Notice on Deepening the Market-Based Reform of New Energy Feed-in Tariffs to Promote High-Quality Development, according to which the energy storage system is no longer mandatory when newly installing new energy power generation projects after the policy takes effect on June 1, 2025. Therefore, the production growth of energy storage batteries is likely to be slower than the original expectation through 2025 due to the new regulation. But the LFP production scheduling in March is likely to recover to the level in January.
Based on the new situations, Mysteel has adjusted the supply-demand balance forecast for February to supply surplus at around 3,000 tonnes due to the supply growth exceeding the expectations, a bearish factor to lithium carbonate spot prices.