China's Xinjiang Xihai Lithium, formerly known as Xinjiang Zhicun Lithium, has started up the first phase of a plant for lithium carbonate in Luopu county, Hetian area of northwest China's Xinjiang region.
The first phase of the production facility has a designed capacity of 30,000 t/yr for battery-grade lithium carbonate. It can process 300,000 t/yr of lithium concentrate, the local government said on 20 September.
The company plans to invest 4.6bn yuan ($646.7mn) to develop the project. Further details including the timelines for the other phases were not disclosed.
The rapid development of the energy transition sectors, particularly electric vehicles and energy storage systems, has prompted companies to invest in new production or expansion projects. But the growth in supply has exceeded that of demand, leading to slight oversupply.
The company's production complex in the Bayingolin Mongolian Autonomous Prefecture, Xinjiang, also launched the first phase of a 60,000 t/yr production line for lithium carbonate in July 2023.
Argus forecasts lithium feedstock supply will reach 1.6mn t lithium carbonate equivalent (LCE) in 2025, rising by 17pc on the year, while annual demand will reach 1.58mn t LCE, indicating 20,000t of oversupply.
Argus-assessed prices for 99.5pc grade lithium carbonate rose to Yn72,700-74,200/t ex-works on 19 September from Yn72,000-74,000/t ex-works on 16 September, supported by a rise in consumer demand during the industry's peak season in September and October, as well as firm prospects for medium and long-term demand.
