The lithium carbonate production in Jiangxi Province, a major producing region in China, is expected to be down nearly a quarter month on month (MoM) in February as a result of the upcoming environmental protection inspection initiated by the central government as well as the maintenance during the holiday season, per Mysteel survey.
YICAI, a news reporting institution, firstly reported the news with solid information source on February 23, citing extensive environmental inspection in Jiangxi Province anticipated in March, as well as the Province's voluntary rectification starting as early as on February 22, which immediately boosted the lithium carbonate futures prices.
Source: GFEX
The news has not only rattled the market sentiment, but also brought material influence on the production of local smelters.
According to a recent survey of Mysteel, apart from the top-tier smelters that maintained normal production, most smelters in Jiangxi Province have reported production curtailment or delayed production resumption due to the environmental issue, when nearly half of them were still closed for maintenance.
The focus of this time's inspection will be on the treatment and flow of lithium slag. At present, most lithium slag is dumped and piled up at the landfills, except for some with in-house treatment facilities, learned by Mysteel. According to a source familiar with the issue, the available landfills have little space left, and the construction of new ones still awaits approval.
In addition, it remains unclear whether lithium slag shall be taken as solid waste or hazardous waste, whose storage and treatment expenses differ wildly at Yuan 35/tonne/year and Yuan 2,000/tonne/year respectively.
Nevertheless, the smelters have put efforts into the research and development of slag recycling routes, which can be reused in ceramics, cement, and construction materials for the rich content of silicon after removing the hazardous elements like rubidium, cesium, thallium, etc.
Source: Mysteel survey
To sum up, Mysteel expects the lithium carbonate production to fall 4,280 tonnes or 24.1% MoM in Jiangxi in February for maintenance during the holiday and the environmental issue, before rebounding by 1,200 tonnes in March.
Written by Aggie Hu, huchenying@mysteel.com
