Last week, Roskill was invited to attend the completion ceremony of Yibin Tianyi Lithium, that has formally commissioned a 20ktpy lithium hydroxide plant in Yibin, Sichuan province. More than 100 attendees were present, including local authorities and supply chain participants.
Yibin Tianyi Lithium Industry Co., Ltd. was established in 2018 as a joint venture of Shanghai Canmax Electronic & Mechanical Equipment, CATL Contemporary Amperex Technology and Yibin Tianyuan Group. The company plans to construct 45ktpy of lithium hydroxide capacity in two phases and targets a total capacity of 100ktpy by 2025. The start-up of phase II construction occurred on the same day as commissioning of the phase I plant. The trial run of phase I started in July and the plant is running at 30tpd at present. As of December, roughly 3kt of lithium hydroxide has been sold to industrial application sectors such as greases, or for further processing.
Yibin Tianyi Lithium has a 5-year offtake agreement with Pilbara Minerals Limited to take up to 75ktpy of spodumene concentrate, with an initial 60kt to be supplied in 2020. It also holds a 9% stake in AVZ Minerals Limited, an Australian listed mining company which owns the Manono lithium project in DRC.
Roskill notes that in response to growing demand for high-nickel cathode materials, Chinese lithium convertors have constructed and commissioned significant lithium hydroxide capacity since 2019. Yibin Tianyi Lithium is one of four projects commissioning production in 2020, with the others being Guangxi Tianyuan (25ktpy), Yahua Lithium (20ktpy) and Ganfeng Lithium (50ktpy).
Prices for lithium carbonate recovered sharply in Q4 2020 as many manufacturers are increasingly looking at production of LFP-type cathodes or using lithium carbonate for low- to mid-nickel cathode materials. Meanwhile, hydroxide prices have flattened out as there remains a build-up of hydroxide capacity in China ahead of the demand profile, Roskill says.
This has seen hydroxide prices fall below carbonate prices for the first time in recent years, though the trend is only forecast to continue in the short term as future demand growth for hydroxide is expected to quickly catch up with supply.
Roskill statistics show that the market share of NCM523 in Q1-Q3 2020 was reduced to 24% with NCM712, NCM811 and NCA expanding quickly y-o-y. Roskill believes cathode producers will continue to favor nickel-rich cathodes going forward, leading to a 61% increase in hydroxide demand in 2021 and supporting an upward trend in prices for lithium hydroxide.