China's lithium imports to stay elevated amid tight domestic supply

China's lithium carbonate and hydroxide imports are expected to stay at elevated levels over the coming months, as the country tries to fill the gaps in its domestic supply, sources said Nov. 23.

China's lithium industry has seen surging demand from electric vehicles, as the country focuses on achieving its decarbonization goals.

Its 2021 new energy vehicle production is on the brink of breaking last year's record, with January-October output hitting 2.57 million units, up 133.2% from the same period a year ago, latest data from China Association of Automobile Manufacturers showed.

Imports and exports

China's lithium carbonate imports jumped 193.5% month on month and 59.8% year on year to 10,476 mt in October, the country's customs data showed Nov. 23.

Its lithium hydroxide imports soared 109.2% on the month and 116 times on the year to 829 mt during the same period, according to the data. Meanwhile, its lithium hydroxide exports to South Korea and Japan were at 4,144 mt and 2,017 mt, respectively, in October. Lithium carbonate exports to the two countries reached a combined 540 mt last month.

Power battery output

China's output of power batteries -- major consumers of battery metals -- hit a record high of 25.1 GWh in October, up 8.4% month on month and 191.6% year on year, according to data released by the China Automobile Battery Innovation Alliance.

Ternary battery output and lithium iron phosphate battery (LFP) output reached 9.2 GWh and 13.5 GWh, respectively, accounting for 36.6% and 63.3% of the country's total battery output. LFP battery makers are major consumers of lithium carbonate, and October output suggests that domestic demand has been strong.

Battery metals price

Sources said the supply from brine producers could decrease during the winter season in China, lending support to domestic lithium chemical prices in the fourth quarter of 2021.

Chinese lithium carbonate prices seemed to have peaked in November for the first time since S&P Global Platts started the assessment Jan. 4, 2019.

Lithium carbonate prices rose 238.3% since the beginning of 2021 through Nov. 19, while hydroxide prices increased 252.8% over the same period, Platts data showed.

Platts assessed battery-grade lithium carbonate at Yuan 203,000/mt ($31,819/mt) and battery-grade lithium hydroxide at Yuan 187,000/mt Nov. 19, up Yuan 5,000/mt and Yuan 1,500/mt, respectively, on the day. Both were on a delivered, duty-paid China basis.