Summary of Conference Call on China Battery Materials Industry Overview - The focus of the conference call is on the lithium battery materials industry in China, particularly the demand and supply dynamics of lithium as of October 2025. Key Points and Arguments 1. **Lithium Production and Inventory Trends** - Weekly lithium output increased by 2%, with brine-based lithium output rising by 7% week-over-week (WoW) due to Zangge's brine resumption. Additionally, weekly lithium inventory decreased by 2% WoW [1][2] - The total inventory of Li2CO3 was reported at 132,658 tons, reflecting a 2% decrease WoW [2] 2. **Demand Indicators** - The cancellation of 12,213 units of lithium warehouse receipts in GFEX indicates strong on-the-ground battery demand in October [1] - Channel checks with ZE Consulting suggest that the production pipeline of the top five battery makers is expected to increase by 11% month-over-month (MoM) and 39% year-over-year (YoY) in October 2025 [1] 3. **Production Output Projections** - Lithium production output is projected to rise by 4% MoM, indicating a positive outlook for supply in the coming weeks [1] 4. **Price Stability** - Lithium carbonate (Li2CO3) and lithium hydroxide (LiOH) average selling prices (ASP) remained largely stable, quoted at Rmb73,000/ton and Rmb73,100/ton respectively as of October 16, 2025 [2] 5. **Inventory Breakdown** - The inventory of downstream players, mainly cathode makers, decreased by 3% WoW to 57,735 tons, while smelters' inventory fell by 1% to 34,283 tons. Conversely, battery makers and traders saw a 1% increase in inventory to 40,640 tons [2] Important but Overlooked Content - **Key Catalysts to Monitor** - The approval progress for licenses at CATL's JXW mine and potential risks associated with disruptions at seven other mines in Yichun are critical factors to watch in the near term [1] - **Market Sentiment** - The overall sentiment in the lithium market appears to be bullish, driven by robust demand from battery manufacturers and stable production outputs, which may present investment opportunities in related sectors [1][2]

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies within it [2]. Core Insights - The inventory of lithium held by battery makers and traders has increased by 6% week-over-week (WoW) and 18% month-over-month (MoM), reaching 41,430 tons, indicating a potential accumulation strategy by major battery makers in anticipation of strong production or possible future disruptions [1]. - The average selling price (ASP) for lithium carbonate (Li2CO3) and lithium hydroxide (LiOH) showed mixed results, with Li2CO3 priced at Rmb63.7k/ton and LiOH at Rmb57.4k/ton as of July 10, 2025, compared to Rmb62.1k/ton and Rmb57.6k/ton the previous week [1]. - China's Li2CO3 production increased by 4% WoW to 18,813 tons, with contributions from various sources: brine (+2%), lepidolite (+5%), spodumene (+5%), and recycling (-1%) [1]. Summary by Sections Inventory Analysis - Total inventory of Li2CO3 reached 140,793 tons this week, reflecting a 2% increase WoW. The inventory breakdown includes downstream players (40,765 tons, +1% WoW), smelters (58,598 tons, 0% change), and battery makers/traders (41,430 tons, +6% WoW) [1]. Production Insights - The production of Li2CO3 in China was reported at 18,813 tons, marking a 4% increase WoW. The production from brine, lepidolite, and spodumene sources saw increases of 2%, 5%, and 5% respectively, while recycling output decreased by 1% WoW [1].

Investment Rating - The report reiterates a positive outlook on lithium prices, suggesting that the near-term trough has been reached with higher upside risks than downside risks [1][2]. Core Insights - Lithium prices have stabilized and slightly rebounded by 1% after a significant decline, with a quarter-to-date average selling price (ASP) down by 13% quarter-over-quarter [1]. - The report highlights that many lithium producers are currently operating at a loss, indicating potential offline maintenance or production suspension in the near future [1]. - Zimbabwe plans to ban the export of lithium concentrates starting in 2027, which is expected to positively impact long-term supply and demand dynamics by encouraging local processing [1]. Production and Inventory Summary - As of June 12, 2025, the ASP for lithium carbonate (Li2CO3) and lithium hydroxide (LiOH) is reported at Rmb60.7k/ton and Rmb65.7k/ton, respectively, showing slight increases from the previous week [2]. - China's Li2CO3 production increased by 4% week-over-week to 18,127 tons, with contributions from various sources: brine (+2%), lepidolite (+4%), spodumene (+5%), and recycled materials (-1%) [2]. - Total inventory of Li2CO3 reached 133,549 tons, reflecting a 1% increase week-over-week, with downstream players' inventory decreasing by 1% to 40,686 tons [2].