The global lithium market is expected to remain weak in the first half of 2020 with a stronger balance of supply and demand in the second half, according to Brisbane-based lithium producer Orocobre.
"In the short term, higher than normal inventory levels in some parts of the supply chain are expected to temper price recovery, concealing an underlying improvement in demand," the company said.
After a significant downturn for most of 2019, Orocobre noted that upbeat demand indicators and further supply curtailments which emerged in late 2019 and early 2020 should improve the market balance in 2020.
Orocobre's Olaroz operation in Argentina produced 3,586t of lithium carbonate in October-December, 16pc higher than in July-September, but 5pc lower than a year earlier. Sales of 3,287t were 6pc higher than in July-September.
The company reported an average sales price of $5,419/t for October-December. This compares with an average of $7,111/t in July-September and $10,587/t in October-December 2018.
Although cash costs were reduced by 16pc to $4,109/t, margins of $1,310/t were 41pc lower than in July-September and 80pc lower than a year earlier.
Orocobre said that stage two of its Olaroz lithium carbonate production plant, which is increasing output to 42,500 t/yr, was 25pc completed as at 31 December. The company has spent $39.3mn on the expansion project so far.
The 10,000 t/yr lithium hydroxide plant at Naraha in Fukushima prefecture, Japan, which is being co-developed with Toyota Tsusho, was 40pc completed as at 31 December.
By Angus Macmillan
