<article><p class="lead">Existing challenges in the global lithium market were compounded by the Cobid-19 outbreak during January-March, affecting operations and logistics, according to Australia-based lithium producer and developer Orocobre.</p><p>Downstream customers in Europe and the US were affected to a greater degree than raw material and refining operations in Australia, China and South America, the company said, while supply-demand imbalances grew during January-March and resulting in greater pricing pressure for lithium chemicals.</p><p>While there has been some recovery in the Chinese market, any further recovery depends heavily on government stimulus and continued strong sales of Tesla's China-centric electric vehicle model to be released later this year, Orocobre said. Outside of China, the battery supply chain is expected to affected by up to six months and economic factors are likely to delay the recovery of battery and non-battery demand to 2021.</p><p>Output of lithium carbonate during January-March at Orocobre's Olaroz plant in Argentina totalled 2,732t, down by 11pc on a year earlier and by 24pc from October-December. This was partly because of Covid-19 lockdown measures imposed in late March and a maintenance shutdown earlier in the quarter.</p><p>Sales of 2,518t were 29pc down on a year earlier and 23pc lower than in October-December. Revenue of $12mn was 64pc lower than a year earlier and 32pc down on October-January.</p><p>The average price received of $4,810/t was 49pc lower than a year earlier and 11pc down on October-December. The gross cash margin of $838/t was 69pc down on a year earlier, although only 2.8pc lower than in October-January because of cost-cutting measures.</p><p>Orocobre expects the completion of the second stage of Olaroz to be delayed because of the Covid-19 disruptions. Stage two is 35pc complete after expenditure of $130mn.</p><p>The 10,000 t/yr Naraha lithium hydroxide plant in Japan, being developed with joint-venture partner Toyota Tsusho, is more than 50pc complete but is expected to be delayed by the late arrival of equipment from outside Japan.</p><p class="bylines">By Angus Macmillan </p></article>
