- Chinese lithium prices down by Yuan 2,000/mt
- Strong downstream resistance pressure lithium prices
- Spodumene prices steady amid limited spot liquidity
Chinese lithium prices fell Nov. 5 amid slow demand due to strong downstream resistance toward high lithium prices.
S&P Global Platts assessed battery grade lithium carbonate at Yuan 196,000/mt Nov. 5, on a delivered, duty-paid China basis.
Offers were heard up to Yuan 200,000/mt for battery-grade lithium carbonate in the week to Nov. 5, and tradable values were pegged between Yuan 190,000-200,000/mt, with some market sources saying that prices were expected to continue a downward trend.
While lithium salts were still in tight supply, current prices were reaching the acceptance limit of downstream end-users, resulting in sparse trading activity.
“I believe Yuan 200,000/mt is the limit and downstream cannot accept prices beyond that,” a lithium converter source said.
Market players had largely adopted a wait-and-watch approach, as demand was expected to taper off in the first quarter of 2022.
“Traders are actually very cautious about procuring now as they are concerned that prices will drop further. They will only procure if they need to fulfill contracts with downstream consumers and they have nearly no excess inventory,” a Chinese trader source said.
S&P Global Platts assessed battery-grade lithium hydroxide at Yuan 191,000/mt DDP China Nov. 5. Platts assessed spodumene concentrate with 6% lithium oxide content (SC6) at $2,564/mt FOB Australia Nov. 5, unchanged from Oct. 29.
The spread between lithium carbonate-hydroxide was expected to remain negative, as lithium-iron-phosphate (LFP) batteries dominate the Chinese domestic market, due to its lower cost in comparison with nickel-cobalt-manganese (NCM) batteries, according to market sources.
Spot activity for spodumene concentrate was muted following Pilbara Mineral’s third spodumene auction on Oct. 26, due to ongoing supply constraints.
“Sellers are not in a hurry to sell and some are also holding on to materials to see if prices will continue to hike,” said a Chinese cathode maker source.
The Wodgina mine, which restarts in Q3 of 2022, was expected to help ease supply concerns, but lithium salt prices will remain high for the time being as spodumene supply was constrained, said a producer.
