China lepidolite mines currently operating rate is only 20-30%....

China lepidolite mines currently operating rate is only 20-30%.
Lithium futures price will head towards at least CNY 150,000 per ton over coming weeks, imo.


Yifeng has a total of 31 mineral processing plants, each of which has invested tens of millions of yuan. There are currently more than 25 companies that have stopped production, and there are still a few that have not stopped production. They are the lithium carbonate production companies' own mineral processing plants, which are used to process minerals for their own lithium carbonate production lines.


s lithium carbonate picking up? Actual exploration of "Asian Lithium Capital": Companies say the operating rate is only 20% to 30%, and most mineral processing plants may temporarily suspend production.

daily economic news2024-03-18 21:46:43



◎Two years ago, while walking in Huaqiao and Tongan, the main lithium mining areas in Yifeng, I saw an endless stream of large trucks loaded with ore on the road. Now, the frequency of truck traffic has dropped significantly.
◎The sales manager of a local bank in Yifeng said that last year, more than a dozen local drivers approached her for loans to buy trucks, preparing to join the lithium ore transportation army. But this year, there are no such drivers.
Reporter Yu Yaofeng, Intern Liu Ying, Editor Liang Xiao
After the Spring Festival in 2024, the lithium carbonate market ushered in a wave of Chinese New Year. The price per ton of battery-grade lithium carbonate rose from more than 90,000 yuan before the Spring Festival to the current over 110,000 yuan, with the highest during the period exceeding 120,000 yuan.
Is the lithium carbonate market starting to pick up? In mid-March, a reporter from "Daily Economic News" came to Yichun City, Jiangxi Province, known as the "Lithium Capital of Asia". After visiting lithium carbonate companies and some traders, the reporter learned that many companies in the lithium carbonate industry chain are still suspended.
"Currently there are basically only four companies (in production) in Yifeng...the operating rate is only 20% to 30%, and now many companies have stopped." said the sales manager of a lithium carbonate company located in Yifeng County.
Price increase due to low operating rate

Yichun is known as the "Lithium Capital of Asia". According to "Jiangxi Daily", Yichun City's annual lithium carbonate production in 2023 is 158,900 tons, accounting for 34.5% of the total domestic lithium carbonate production.
Yichun has the largest lithium carbonate production capacity in the country. After the Spring Festival in 2024, news spread that the central environmental protection inspection team might come again. Major lithium carbonate companies have suspended production and reduced production in response to environmental inspections.
The subsequent impact is that after the Lantern Festival, the price of domestic lithium carbonate has risen from more than 90,000 yuan per ton, to a maximum of more than 120,000 yuan. The increase exceeded 20%.
On March 13, a reporter from "Daily Economic News" came to Yifeng County, Yichun City. The county is the county with the largest lepidolite mineral resources in Yichun City. It is also home to a large number of domestic lithium battery companies, including CATL (300750.SZ, stock price 190.96 yuan, market value 840.041 billion yuan), Yongxing Materials (002756.SZ, stock price 53.02 yuan, market value 28.583 billion yuan), Guoxuan Hi-Tech (002074.SZ, stock price 20.75 yuan, market value 37.045 billion yuan), etc. have laid out the lithium carbonate industry here.
In the Yifeng County Industrial Park, the reporter noticed that at the gate of the lithium carbonate production enterprise, it was difficult to see trucks entering or exiting in half a day. According to multiple industry insiders, there are currently only four lithium carbonate companies producing in Yifeng County, including CATL’s project in Yifeng, which has not yet been put into production.
CATL’s project company in Yifeng is Yichun Longpan Times Lithium Technology Co., Ltd. (hereinafter referred to as Longpan Times). Public information shows that the above-mentioned project is jointly invested by Longpan Technology (603906.SH, stock price 10.3 yuan, market value 5.82 billion yuan) and CATL. The company is located in Yifeng County Industrial Park, Yichun City, Jiangxi Province, with a total project investment of 3.5 billion yuan. The first phase covers an area of more than 600 acres to build a battery-grade lithium carbonate production plant with an annual output of 40,000 tons, as well as an integrated living and working park with complete ancillary facilities such as laboratories, office buildings, employee apartments, canteens, and activity centers.

Picture source: Photo by Yu Yaofeng, a reporter from Every Journal
"Daily Economic News" reporters came to Longpan Times and saw many construction workers at the project gate. One worker said that he was doing pipeline construction in the company. On March 18, the relevant person in charge of Longpan Technology told reporters that Longpan Times started trial production in March this year and has been in the trial production process.
Later, as a trader, the reporter came to a lithium carbonate company that was producing lithium carbonate. The person in charge of the company's sales department said that although they are currently producing, their production capacity has been halved. They only produce three to four hundred tons per month, and they are produced according to orders, and there is no stock in stock. The person in charge said that the current operating rate of Yifeng lithium carbonate production is low, only 20% to 30%.
Regarding the current rise in lithium carbonate, the person in charge said that this has something to do with the low operating rate of local lithium carbonate companies and the decline in production capacity.
Mineral processing plant owner: Most mineral processing plants may temporarily suspend production

Although the price of lithium carbonate has rebounded recently, judging from the current situation of the local lithium carbonate industry in Yichun, there has been a significant cooling down in terms of mining of raw ore, intermediate transportation, mineral processing, and final production.
In Yifeng County, Yichun City, the days when you could go up the mountain to pick up "stones" (referring to lithium ore magnets) with just a basket are long gone. Two years ago, while walking in Huaqiao and Tongan, the main lithium mining areas in Yifeng, I saw an endless stream of large trucks loaded with ore on the road. Now, the frequency of truck traffic has dropped significantly.
Truck driver Wang Ming (pseudonym) told the "Daily Economic News" reporter on the phone that after the Chinese New Year this year, his truck has never been loaded with lithium ore and has been parked at the mine. "The peak will be in 2022. At that time, the daily gross profit will be four to five thousand yuan." Wang Ming said that by 2023, it will have dropped significantly, and the daily gross profit will be only two to three thousand yuan, and it will be even lower in the second half of the year.
The sales manager of a local bank in Yifeng told reporters on WeChat that last year, more than a dozen local drivers approached her for loans to buy trucks, preparing to join the lithium ore transportation army. But this year, there are no such drivers.
When the market for lithium carbonate is good, those with little money will buy trucks for transportation, while those with strong funds will engage in equipment, smelting and processing, all trying to get a piece of the cake.
Yichun's lepidolite lithium extraction technology requires first processing the lithium ore and selecting mica. This step is called mineral processing, and then processing the mica to produce lithium carbonate.
Yang Fan (pseudonym) is the owner of a mineral processing plant. "We did it for two months last year (and stopped production), and it just stopped there." He told reporters on the phone. Yang Fan said that Yifeng has a total of 31 mineral processing plants, each of which has invested tens of millions of yuan. There are currently more than 25 companies that have stopped production, and there are still a few that have not stopped production. They are the lithium carbonate production companies' own mineral processing plants, which are used to process minerals for their own lithium carbonate production lines.
Rarely transacted lithium ore trade

The shutdown of the mineral processing plant is not unrelated to the reduction in lithium ore trading.
On March 14, a reporter from "Daily Economic News" communicated with Zhao Xiaohui (pseudonym), the owner of a mining company, as a colleague. At that time, he was drinking tea with several partners in his company office.
Zhao Xiaohui said that now everyone doesn’t talk about mining very much. The fundamental reason is that they can’t make money. Two years ago, in the streets and alleys of Yifeng, the topic of discussion was inseparable from lithium mines. People carried baskets up the mountain to pick up the ore. At most, they could sell it for thousands of yuan a day.
The business scope of Zhao Xiaohui's mining company includes ore processing, that is, beneficiation, as well as sales and trading. He told reporters that there is almost no ore trading in Yifeng County now.
According to Zhao Xiaohui, the price of lithium ore with a grade of 0.5 has now dropped to more than 200 yuan per ton. This price may not be able to be sold. Compared with the peak price of 1400 to 500 yuan per ton, it has dropped by more than 80%.
Zhao Xiaohui said that the reason for the lack of transactions is that most of the production now requires losses, so most of them have stopped.
A partner of Zhao Xiaohui added that the tailings produced by lithium carbonate used to be sold for money, but now they cannot be sold. Instead, they have to spend money to dispose of them, so the company's costs are higher. When the market for lithium carbonate was good, the tailings produced by the company could be sold to generate profits. But now when the market is not good, no one collects the tailings. In addition, more attention is paid to environmental protection issues, and money has to be spent to deal with them. Therefore, the entire industry chain There is not enough kinetic energy on it.
During the interview, the reporter noticed that the shift in the lithium carbonate industry in Yifeng County stems from the return of rationality brought about by the price per ton of lithium carbonate falling from its peak of 600,000 yuan at the end of 2022 to its lowest level of about 100,000 yuan.
The previous turbulent tide is receding. When every link is not making money, some people leave, while others are waiting for the next opportunity.