I was searching for information on Chinese lithium inventories when I found the Mysteel website. https://www.mysteel.net/ Select Commodities then New Energy /Battery Materials from the Drop Down Menu. I found the following to be of interest. While CATL appears to be reducing production, that does not seem to deter the construction of new converters. That to me could indicate confidence in future demand.https://www.mysteel.net/news/5062058-flash-chengtun-mining-groups-lfp-project-has-officially-started-construction Source: Mysteel Sep 11, 2024 18:36 Recently, it's reported that Chentun Mining Group's Xiamen LFP project has started construction, which is also the first physical project invested by Chentun Mining Group in Xiamen. It is reported that the project is located in the Xiang'an District of Xiamen Tongxiang High tech New City, with a total investment of about Yuan 3.1 billion, and plans to build a LFP production base with an annual capacity of 200,000 tonnes. Chen Dong, Chairman and President of Chentun Mining Group, stated that the LFP project will be constructed in two phases and is planned to be fully completed and put into operation in the fourth quarter of 2026. After the project reaches production capacity, it is expected to achieve an annual output value of Yuan 6 billion.
And here are some production figures to consider https://www.mysteel.net/news/5061946-china-lithium-carbonate-production-down-48-mom-in-august Source: Mysteel Sep 10, 2024 12:41 Lithium Demand Production SupplyChina's lithium carbonate production totaled 62,400 tonnes in August, a decrease of 4.8% MoM. In August, some producers in Jiangxi slightly reduced the production due to losses or equipment maintenance. Meanwhile, operations in Sichuan and Qinghai remained relatively stable, but the output in the recycling sector decreased due to meagre profits amidst persistently soft lithium carbonate prices.It is expected that China's lithium carbonate production will rise 1.0% MoM at 63,000 tonnes in September. This increase is attributed to the anticipated rise in downstream demand during the peak season in September, which may encourage smelters to ramp up production. However, with maintenance of production lines at smelters in Jiangxi still ongoing, the overall output in September is projected to experience only a modest increase.
According to Mysteel's research, among the 27 lithium carbonate production companies surveyed in Jiangxi and Sichuan Province, 9 have suspended operations or are under maintenance. Specifically, 5 smelters have either ceased the production or are undergoing maintenance, while 3 have reduced output by a total of 1,600 tonnes. One of these companies are producing in full capacity as it plans to undertake production line upgrades by the end of September, thereby increasing the production by 500 tonnes.For those able to maintain normal production, they either have the profits locked in advance via hedging tools, or secure long-term orders. In addition, several producers, which fail to find low-priced raw materials, choose to re-process the old lithium carbonate sourced from the market and deliver it to the futures market. Table 1: September Production Suspensions and Maintenance for Some Lithium Carbonate Smelters in China [Please view on website as I was unable to copy the table here.] Plenty of interesting news on the Mysteel website, but I still haven't found comprehensive figures on the inventories held by traders and converters. I have a recollection of reading a couple of weeks ago that, on average, converters were holding stocks of 1.4 months supply (to be converted).
Cantankerous James
PLS Price at posting:
$2.90 Sentiment: Buy Disclosure: Held
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