Lithium exports to China are up sharply.
In its lithium market section from its recent quarterly production report, Allkem estimated that spodumene concentrate volumes shipped to China from Australia for October and November 2022 were 23% higher compared to the previous corresponding period due to new supply from brownfield expansions and restarted idle capacity.
Allkem also noted that estimated lithium chemical production in China was up by ~14% quarter on quarter largely due to increased production from hard rock sourced lithium supply.
"Despite this increase, the spodumene concentrate market remains tight with limited material available to the open market due to the majority of the product already being locked under existing offtake arrangements or allocated for internal consumption by integrated producers," wrote the company.
Allkem noted that sales continued to drive demand with December quarter Chinese EV sales reaching record highs at 2.3 million units, a 82% YoY increase. Sales from the key EU countries also posted strong growth at 0.7 million units, up 38% YoY during the quarter.
"Global sales are forecast at ~3.5 million units for the December quarter, and annual sales are expected to reach ~10.5 million units representing 57% growth YoY. EV sales growth is expected to remain robust in 2023 given strong order books and potential pent-up demand: consensus forecasts for global EV sales indicate sales could reach over 14 million units in 2023.
"Supportive government targets and policies announced globally (including subsidies or tax incentives), continue to ensure strong fundamentals for future growth."
