In November, China's LCO production was 6,980 mt, down 3% MoM and 11% YoY. Supply shrank noticeably in November from October. The LCO market hit its off-season in November; despite some early to mid-month sporadic new orders, activity slowed considerably later, easing LCO prices. Raw material costs, including cobalt and lithium carbonate, significantly fell, lowering production costs.
The LCO market is driven by long-term contracts, with few spot deals. Downstream cell makers are skeptical about near-term digital product demand, potentially delaying orders and slowing pickups. The e-cigarette market remains cool, while battery swapping demand stays stable. Entering December's off-season, downstream firms weigh raw material costs, reducing orders with little hope for a short-term rebound. December's LCO production is forecasted at 6,081 mt, down 13% MoM, up 6% YoY.
