Prices of lithium carbonate assessed by Benchmark Mineral Intelligence have reached new all-time highs on the back of limited supply and high and sustained lithium ion battery demand in China.
Benchmark’s EXW China (Battery) grade of lithium carbonaterose by 26.5% to RMB 160,000/tonne ($24,800) in the two weeks to 30 September 2021.
This surpasses the previous high of $24,750/tonne for battery grade lithium carbonate assessed on 30 March 2018 and marks a new era for the lithium industry.
The highest end ofBenchmark’s published range for our EXW Chinagrade in September reached RMB 180,000/tonne ($27,900).
During the month,Benchmark’s EXW China (Technical) gradeof lithium carbonate increased by 29.5%, marking some of the largest price jumps ever experienced in the lithium industry.
Looking forward, record high spot transactions are likely to incentivise a strong upward revision of contract prices in Q4 as new deals and pricing breaks are negotiated for the start of 2022. Historically, supply contracts are negotiated in Q4 and can be influenced by sentiment in the spot market. It is this revision that sparked the surge in lithium chemicals pricing in 2015, indicating that the start of 2022 could see further momentum in price rises.
Market contacts have also reported to Benchmark that they expect a larger proportion of the supply chain may look to implement monthly, rather than quarterly, price breaks, fuelling the surge further if typically discounted contracted volumes become more regularly based on escalating spot deals.
Limited available supply within the domestic China market has served to push lithium carbonate prices to these new levels with lithium ion battery demand remaining high and steady after a year of significant growth.
Surging prices in the chemical market have not only been driven by tight supply and strong downstream demand, but also rapidly increasing feedstock costs asBenchmark’s Lithium Spodumene (FOB Australia) grade was assessed up 86% in Septemberas lithium chemical converters scramble to secure available spot material.
WhileBenchmark’s EXW China hydroxide pricehas also seen unprecedented upward movement, rising by 68.4% over Q3 to an average of RMB 157,500/tonne ($24,425), robust demand for LFP chemistry cathodes in China has once again placed carbonate at a historically unusual price premium over hydroxide.
