<article><p class="lead">China's key lithium carbonate producer Qinghai Salt Lake Lithium is on track to reach full capacity at its new 20,000 t/yr battery-grade carbonate production facility in late October following pilot operations since May. </p><p>The facility will raise the firm's total carbonate capacity to over 30,000 t/yr. The plant also has a 10,000 t/yr industrial-grade lithium carbonate production unit, which is scheduled to operate at full capacity this year. </p><p>The firm, located in northwest China's Qinghai province, extracts lithium carbonate from brine in the Qarhan salt lake using adsorption and membrane technology. It produced 13,602t and 8,466t in 2020 and the first half of 2021 respectively, with production guidance of 24,000t for this year. </p><p>China is on track to construct a world-class salt lake industrial cluster in Qinghai in light of its abundant lithium resources. Lithium is a key ingredient in electric vehicle (EV) batteries. Chinese president Xi Jinping said in March that China should speed up construction of the Qinghai cluster.</p><p>The Qarhan salt lake can supply 200,000 t/yr of lithium carbonate equivalent from brine, which may prompt Qinghai Salt Lake Lithium to expand its capacity in the long term, according to market participants. </p><p>Fellow lithium carbonate producer Golmud Zangge Lithium, which also extracts lithium carbonate from brine in the same salt lake, is on track to reach full capacity of 10,000 t/yr by the end of this year. It produced 4,229.88t in 2020, with no year-earlier comparison available.</p><p>Major Chinese lithium producer Jiangxi Ganfeng in March unveiled a plan to acquire a 49pc stake in Minmetals Salt Lake, which owns the Yiliping lithium salt lake project in the Qaidam region of Qinghai. </p><p>Higher downstream demand, particularly from the EV power battery, energy storage battery pack, polymer lithium battery and TWS wireless Bluetooth headset battery sectors, has boosted requirements for lithium salts and prompted industry participants to accelerate construction of lithium salt facilities.</p><p>Lithium salt prices have extended gains in the last couple of months in response to rising lithium concentrate costs, driven by tight spodumene feedstock supplies and strong demand from the EV and energy storage sectors. <i>Argus</i>-assessed prices for 99.5pc grade carbonate, a main feedstock in lithium iron phosphate batteries, rose sharply to Yn100,000-105,000/t ex-works yesterday from Yn95,000-99,000/t ex-works on 12 August because of insufficient lithium concentrate supplies. Import prices also moved higher to $13-13.50/kg cif China yesterday from $12.80-13.50/kg cif China a week ago on tight supplies and buoyant downstream demand.</p></article>
