Orocobre sees lithium market remaining tight
Australia-based lithium producer Orocobre believes the overall lithium supply-demand picture has not changed significantly, despite volatility in China caused by changes to electric vehicle (EV) subsidies, a shift to high-nickel cathode and some new supply entering the market from the Qinghai region.
"Our view remains that tight market conditions will persist with some lumpiness or variability to be expected as the market grows and at times becomes more exposed to short-term macro-environmental factors," it said in its July-September quarterly report.
Orocobre reported lithium carbonate output of 2,293t from its 66.5pc-owned Olaroz facility in northern Argentina, 7pc higher than in the previous July-September quarter, but 36pc lower than in the April -June quarter because of plant maintenance and seasonally lower evaporation rates.
Revenue of $32mn was 36pc higher than a year earlier with an average received price of $14,699/t. Cash costs averaged $4,640/t, providing a record gross cash margin of $10,059/t.
October-December quarter output is expected to be higher than the July-September quarter, but average received prices are expected to be lower.
A $40mn early works programme is underway for the $285mn stage two expansion of Olaroz, which will increase output capacity by 25,000 t/yr to $42,500 t/yr. It is expected to start lithium carbonate production in 2020.