Lithium prices have collapsed, forcing Chinese companies to reduce production of a crucial battery component at a major industrial hub.
According to a story in the Chinese journal Paper. Which did not name any specific enterprises and cited an unnamed source, some lithium manufacturers in Yichun, Jiangxi Province, including 2 significant ones, have slowed down processing rates to reduce losses.
An eastern Chinese city produced 11 percent of the nation’s total lithium carbonate in 2022.
Concerns about increased supply & slower Electric vehicle demand growth have turned that rally. With costs in China falling by around 63 percent since they hit a record peak in Nov.
In the short term, the lithium carbonate price decline may be supported by the Yichun refinery’s suspension of operations. According to Rystad Energy analyst Susan Zou.
According to statistics from Asian Metal Corp., lithium carbonate prices on Thursday ended a 16-day falling trend to remain at 217,500 yuan (31,613 dollar) per tonne. These are still significantly higher than the multi-year lows hit in 2020, which are more than 5 times lower.
The recovery of demand, which Zou believes is unlikely to occur in the upcoming month, will determine whether there is a significant price rebound.
According to local media, producers in Yichun were single out for environmental violations. And unauthorised mining previous month, with several ministry representatives travelling from Beijing to look into the industry.
Chinese industry behemoths Tianqi Lithium Corp. and Ganfeng Lithium Group Co., both of which reported record profitability in 2022, stated previous week. That a future reduction in world’s lithium-ion battery material shortfall is possible. Tianqi also expressed concern about lithium pricing issues in future.
The assessment was share by Citigroup Inc. Which pointed to sluggish downstream consumption in the near future as Chinese customers continued to deplete stockpiles.