Demand for lithium chemicals remained strong across all key geographies and customer segments (industrial applications and battery materials) in response to improved business confidence levels.

Customers' concerns for securing supply also intensified during the June quarter as evidenced by enquires for delivery of volumes in 2021 being higher than originally requested. Existing and prospective customers have also engaged earlier than usual to secure product volumes for future years.

Lithium chemical prices continued to grow during the quarter with strong demand from the Electric Vehicle ("EV") sector where sales in the period January to May reached two million vehicles (compared to 750k in 2020 and 850k in 2019 over the same months).

Whilst lithium carbonate prices stabilised in China, global weighted average prices reported by Benchmark Minerals increased by 15.6% during the quarter from US$10,752/tonne in March to US$12,432/tonne in June as prices ex- China continued rising and narrowing the gap with China. Lithium Hydroxide prices once again established a premium over carbonate prices during the June quarter with weighted average prices of US$13,873/tonne as reported by Benchmark Minerals.

The commitment from Government, OEMs, and the Energy Sector to accelerate the development of the lithium battery supply chain grew firmly during the June quarter. Planned global capacity of Gigafactory's increased by ~ 460 GWh (12%) to approximately 4,200 GWh by 2030 based on committed investments announced during the June quarter. Such indicators continue to put pressure on development of lithium chemical supply and widen the estimated supply deficit.

Estimated lithium chemical production and conversion in China increased to ~20,500 tonnes of lithium carbonate per month during the June quarter from ~14,500 tonnes per month during the preceding nine months. Lithium hydroxide capacity over the same periods increased to ~14,500 tonnes per month from ~12,300 tonnes per month. The overall increase in production of lithium chemicals was in response to the accelerated demand from the EV sector and was partially achieved with incremental supply from Chinese brines during the spring period which assisted in stabilising lithium carbonate domestic prices. Australian spodumene producers also lifted utilisation rates and exports to China benefitting from a significant increase in prices during the period.

New partnerships were established between lithium chemical producers and lithium mineral explorers with the purpose of developing additional supply of lithium chemicals in response to growing demand. Supply forecasts of lithium chemicals have been revised up during the quarter considering recent announcements, however, it continues to fall short of meeting the revised estimates of demand.