(Adds analyst comments)
BEIJING, Jan 30 (Reuters) - China’s lithium production expanded strongly in 2022, an industry association said, buoyed by strong demand from the new energy sector and soaring prices.
China produced 395,000 tonnes of lithium carbonate last year, up 32.5% year on year, according to China’s Nonferrous Metals Industry Association.
Its output of lithium hydroxide climbed 29.5% to 246,400 tonnes.
Both lithium carbonate and lithium hydroxide are mainly used in battery making for electric vehicles (EVs).
“Solid demand and surging prices stimulated Chinese producers to ramp up their production as well as to expand capacity, while the improved supply of lithium minerals also enabled more output,” said Susan Zou, vice president at Rystad Energy.
She expects production growth to remain strong in 2023, but did not provide a forecast.
Top producers including Ganfeng Lithium and Tianqi Lithium have outlined plans to raise capacity in coming years and made efforts to boost investment in overseas mining resources to secure raw materials supplies.
Sales in the world’s largest and fast-growing EV market surged 93.4% last year to 6.89 million units, while production rose 97.5% to 7.22 million units, according to data from China Passenger Car Association.
The bullish demand combined with constrained supply has boosted lithium prices.
Spot prices for lithium carbonate hit an all-time high last November at 597,500 yuan ($88,477.88) a tonne, as assessed by Fastmarkets MB-LI-0036, up 202.5% from 197,500 yuan around the same time a year earlier.
The prices were last assessed at 477,500 yuan on Jan. 19, reflecting softened sentiment ahead of the Lunar New Year holiday when spot demand is typically weak, and also amid the expectation of a loosening supply deficit in the coming years as production continues to ramp up. ($1 = 6.7531 Chinese yuan renminbi) (Reporting by Siyi Liu and Dominique Patton; Editing by Tom Hogue and Rashmi Aich, Kirsten Donovan)
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