It said that the average realized price for sales is also expected to decline sharply to $4,015 per tonne on a fob Argentina basis in the three months to June-end, down by around 16% from the previous quarter and by around 51% year on year.
The company also announced that planned maintenance at its Olaroz brine mine, in northern Argentina, will be brought forward to late July/early August. It was originally scheduled for August. The company expects operational activity at the site to be halted for approximately three weeks during the maintenance.
“Covid-19 restrictions have limited the ability of both Olaroz and its customers to complete sales during the quarter. While most logistical issues have now been addressed, delivery of product is yet to return to normal as customers delay shipments due to lower production and excess inventory,” the company said.
Lithium compounds are a key ingredient in the manufacturing of batteries used in electric vehicles (EVs), portable electronics and energy storage systems (ESS).
Orocobre’s announcement comes during a period of increased pressure for the lithium market since the start of this year, while the global Covid-19 pandemic has hit both supply and demand in an already low-price environment.
Fastmarkets’ weekly price assessment for lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price range, exw domestic China
was at 39,000-42,000 yuan ($5,512-5,936) per tonne on June 18, down by 2.4% from 40,000-43,000 yuan per tonne the previous week and a decline of 15.6% from 45,000-51,000 yuan per tonne at the start of this year.
Orocobre said that in the continuation of new energy vehicle subsidies in China - one of the most active manufacturers of EVs - is delivering a modest improvement in EV sales, and it expects EV sales in the country to improve for the remainder of 2020 if international brands are made available to buyers.
It added the recent support from European countries to accelerate the shift toward cleaner mobility will have medium- and long-term benefits on EV production and sales.
(In the second paragraph of this story, the price mentioned was reported on a fob Australia basis. The price is in fact on a fob Argentina basis. This has been corrected.)