SMM

China's December 2023 lithium hydroxide production was 20,330 mt, down 3% MoM and 20% YoY, amid weak market supply and demand. New production lines built by some manufacturers are still in the commissioning phase, causing slow industry capacity growth. Lithium hydroxide prices dropping below industrial-grade lithium carbonate prices keeps production profitability low, reducing the operating rates. With subcontracted orders ending, manufacturers' scheduled production is decreasing. As lithium carbonate prices stabilized in mid-to-late December, lithium hydroxide prices saw a slight uplift. Disruptions in the Red Sea route and domestic producers' pre-Spring Festival stockpiling spurred some demand, mildly boosting purchasing interest. Still, with high inventories and order uncertainty, cathode producers are buying cautiously, suggesting the oversupply may persist. SMM predicts China's January 2024 lithium hydroxide output at 18,720 mt, down 8% MoM and 12% YoY.