
Lithium carbonate prices expected to swing lower
----Interview with Jingye Chen
Vice General Manager
Hunan Zhongde New Material Technology Co., Ltd.
Vice General Manager
Hunan Zhongde New Material Technology Co., Ltd.
Hunan Zhongde New Material Technology Co., Ltd. is located in Daping Development Zone, Xinshao County, Shaoyang City, covering an area of 63.7 acres. The company specializes in the production and sales of battery-grade lithium carbonate, with a total investment of 120 million yuan. It has an annual production capacity of 8,000t of battery-grade lithium carbonate, with an annual output value exceeding 1.5 billion yuan. The company promotes the development of new materials industry through high-tech and high-quality services.
Asian Metal: Thank you for accepting the interview with Asian Metal. Please briefly introduce your company's basic situation.
Mr. Chen: Hunan Zhongde New Material Technology Co., Ltd., established in 2012, focuses on the production and sales of lithium carbonate. Our latest production capacity reached 8,000t, and has not only won the honors of national high-tech enterprises and national-level key special new enterprise, but also has more than 40 authorized patents. In 2022, the company successfully produced and sold about 5,000t of lithium carbonate, achieving sales revenue of over 1.3 billion yuan; in 2023, despite changes in the market environment, the company still maintained a production and sales volume of about 5,000t of lithium carbonate, with sales revenue reaching over 900 million yuan; in the first half of 2024, the company continued to operate steadily, producing and selling about 3,000t of lithium carbonate, with sales revenue exceeding 300 million yuan.


Asian Metal: What are the advantages of your company's waste recycling process compared with ore processing?
Mr. Chen: Our company has unique patented technology in waste recycling, one of which is to significantly improve the lithium recovery rate through microwave pre-treatment, thereby further reducing the comprehensive cost.
Asian Metal: From the end of March 2024, lithium carbonate prices continued to decline. In your opinion, what is the main reason?
Mr. Chen: Firstly, in March, all manufacturers basically resumed normal production, and production capacity was effectively released. Secondly, as the end of March approached, downstream industries completed the concentrated replenishment of the peak season. However, after the concentrated consumption of the terminal market before and after the Spring Festival, the consumption momentum weakened at the end of March, which led to some pressure on lithium carbonate prices.


Asian Metal: As we all know, your company has been deeply involved in the lithium carbonate industry for more than 10 years. Could you share how your company responds to the rapid decline in lithium carbonate prices in June? What are the strategies to stabilize prices and profits?
Mr. Chen: Faced with the rapid decline in lithium carbonate prices, we indeed faced considerable challenges. In the past, we could only passively respond to this situation, such as reducing orders, reducing output, or trying to reduce procurement prices of raw material to maintain costs. However, in recent years, we realized that a single response strategy could no longer meet the changing market demands. Therefore, we have adopted a series of diversified strategies to stabilize prices and profits. First, we have strengthened cooperation with upstream and downstream enterprises to jointly respond to market fluctuations by establishing long-term stable cooperative relationships. Second, we increased research and development investment, improved the added value and competitiveness of products, and offset to a certain extent the downward pressure on prices. In addition, we also pay attention to optimizing production processes, reducing production costs, improving production efficiency to maintain product competitiveness.
Asian Metal: In the current market environment, do you think it is a good time to buy lithium carbonate? Why? Where do you think the bottom of lithium carbonate prices is?
Mr. Chen: I think the current lithium carbonate prices are significantly affected by capital sentiment. In fact, from the perspective of industry operations, most production companies are already on the verge of breaking even. From the perspective of production costs, I think the current price of around RMB80,000/t (USD11,210/t) is already close to the bottom, so it is a good time to consider buying in batches. However, the market is affected by multiple factors, especially the profit-seeking behavior and herd effect of capital, which increases the uncertainty of price fluctuations. We predict that the bottom of lithium carbonate prices would be around RMB75,000/t(USD10,510/t).

