Good News & Bad News, page-4462

• Trading activity slows in the week to Oct. 22
• Tight supply supports lithium carbonate prices

Chinese battery-grade lithium carbonate reached Yuan 200,000/mt Oct. 22, the highest since Platts launched the assessment on Sept. 7, 2018, with market sources attributing the price strength to tight supply exacerbated by the upcoming winter.

The price has surged 233% or Yuan 140,000/mt since the start of the year when it was Yuan 60,000/mt Jan. 8.
Offers for battery-grade lithium carbonate were heard in the range of Yuan 200,000-220,000/mt Oct. 22, with tradables at a similarly high level of Yuan 190,000-195,000/mt.
“We are severely short in supply now, offers are all above Yuan 200,000/mt,” a Chinese dealer said.
Several trades were heard concluded at Yuan 200,000/mt, with volumes ranging from one-to-three truckloads (30-32 mt each) for October prompt loading and delivery.
The high traded price has contributed to the low transacted volumes this week, as only buyers with urgent needs were procuring to avoid hefty premiums.
As prices reached an all-time high, market sentiment was cautious, with many wondering if the price has peaked. More traders were seen offloading material in the market Oct. 22 to mitigate potential loss if price correction occurs.
“Traders are dumping stocks today; I wonder when will lithium prices peak,” a Chinese trader said.
However many sources said prices for lithium chemistries were unlikely to fall steeply due to the ongoing power cuts in China, as well as tightness in supply.
Supply shortages worsen as winter approaches as production of industrial-grade lithium carbonate from salt-lakes comes down.
Offers for industrial-grade lithium carbonate was heard stable at Yuan 180,000/mt in the week.
Platts assessed battery-grade lithium hydroxide at Yuan 190,000/mt DDP China Oct. 22. Spodumene concentrate with 6% lithium oxide content (SC6) was assessed at $2,444/mt FOB Australia Oct. 22, unchanged from Oct. 15.
Market sources were anticipating clearer price direction would emerge from the upcoming 10,000 mt spodumene tender scheduled for Oct. 26, with many speculating that the concluding price would fall to $2,600-$3,000/mt.
The previous spodumene tender held Sept. 14 for a spot cargo of 8,000 mt of spodumene concentrate with 5.5% lithium oxide was concluded at $2,240/dmt on an FOB Port Hedland basis, equivalent to $2,420/dmt for 6% lithium oxide.
However, some market sources were hesitant to participate in the auction due to the risk associated with the forward shipment and uncertainties in price direction.
“It is to be delivered in February 2022, there’s quite a bit of risk there,” another domestic trade said.