Lithium prices have bottomed out, according to Australian producer Orocobre, with realised October-December prices expected to be higher than July-September.
"But continued improvements in market sentiment and continued destocking from record inventory levels in mid-2020 will require sustained momentum from European and Chinese electric vehicle markets, alongside discipline from marginal converters and their Chinese and Australian feedstock suppliers," it said in its latest production update.
"The lithium market suffered a setback due to Covid-19, however the medium- to long-term outlook remains positive and continues to be further reinforced by government regulations and funding."
Lithium carbonate output at Orocobre's Olaroz plant in Argentina totalled 2,352t during July-September, 6pc lower than in April-June. Sales rose by 112pc to 3,393t, largely because of discounting of excess inventories. Battery-grade lithium carbonate accounted for 22pc of sales.
The average price received of $3,102/t during the latest quarter was well below the average cash production cost of $3,974/t, excluding an export tax of $70/t.
Orocobre temporarily suspended its Olaroz operations earlier this month because of Covid-19 cases detected in returning workers who were subsequently isolated from other staff. Operations have returned to normal.
Stage two of the Olaroz plant is 44pc complete and is expected start production in the July 2022-June 2023 fiscal year, with full capacity of 25,000 t/yr of lithium carbonate reached by 2026.
The 10,000 t/yr Naraha lithium hydroxide plant in Japan is around 80pc complete with commissioning expected in the first half of 2021.
