This week, lithium hydroxide increased slightly by 250 yuan/mt WoW. In production, lithium hydroxide output in December fell by 22% MoM. Due to weak overall downstream demand and a high proportion of long-term contracts, spot order demand was limited, leaving prices with insufficient upward momentum. Coupled with no significant changes in raw material and processing costs and no notable improvement in losses, some companies have only maintained long-term contract supplies while reducing production in recent months. Combined with maintenance activities at certain major plants, December production saw a significant decline. On the demand side, ternary cathode material production this month decreased by about 7% MoM. With the continued decline in 5-series production, the share of 8-series increased to 40%. Overall performance, driven by end-user expectations of a rush for installations, was better than the same period in previous years.
In the market, upstream lithium chemical plants continued quoting at 70,000 yuan/mt and above, with recent reports of January maintenance and production cuts further supporting their stance to stand firm on quotes. Meanwhile, downstream ternary cathode material plants and end-users showed some inquiry activity, but due to the current high price levels and lack of just-in-time procurement plans, purchase willingness remained weak.
Overall, lithium hydroxide prices recently lacked strong upward momentum due to declining downstream demand and the conclusion of most pre-holiday stockpiling. Prices are expected to continue sideways movement.
