- Consumer destocking limits spot appetite
- Views bearish for Sep
- Lower Chinese, African lithium concentrate offers fail to attract buyers
Chinese lithium carbonate and hydroxide prices both fell by Yuan 17,000/mt in the week to Sept. 15 as futures weakened and physical demand showed little signs of improving.
Platts assessed battery-grade lithium carbonate at Yuan 178,000/mt on Sept. 15 on a DDP China basis, down Yuan 17,000/mt on the week.
Battery-grade lithium hydroxide was assessed at Yuan 168,000/mt on Sept. 15 DDP China basis, down Yuan 17,000/mt on the week.
Hydroxide prices were lower on account of weak nickel-manganese-cobalt, or NMC, demand.
Latest data from the China Automotive Battery Innovation Alliance showed that NMC made up only 31% of electric vehicle battery installations in August, with lithium iron phosphate taking up the lion’s share of 69%.
While there is typically restocking activity ahead of holidays, such as China's National Day holidays from Sept. 29 to Oct. 6, market sources saw thin trading this week and do not expect much support for prices.
Consumers were still mostly digesting raw material and/or finished product inventories.
Views were mixed on inventory levels throughout the supply chain, but battery maker stocks were deemed to be the highest, around one month.
“Salt inventory levels for refiners are definitely not as high as back in April, and that’s because some refiners have been cutting production recently,” a trader said.
Some market sources expected more production cuts in store, as current spot prices have dropped below the cost of production for smaller producers.
Salt lake producers were also expected to experience seasonal production cuts heading into winter.
“At least for September, I think prices will not be impacted,” a producer said. “However moving into the fourth quarter, supply could tighten if demand improves.”
Market sources will be keeping a close eye on the supply-demand balance in the fourth quarter, as Chinese new-energy vehicles sales showed signs of recovery in August, albeit slightly lower than market expectations.
Platts assessed spodumene concentrate with 6% lithium oxide content at $2,750/mt FOB Australia on Sept. 15, down $100/mt on the week.
Indications from buyers trended down, tracking the drop in lithium salts prices, though offers from miners were scarce.
Some traders reported hearing lower offers for domestic Chinese concentrate and African material in a range of $2,200/mt to $2,800/mt, which failed to attract buyers.
Platts is part of S&P Global Commodity Insights.
(20min delay)