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• Sentiment in lithium salts market remains bearish on COVID-19 outbreak
• Spodumene prices down $500/mt

Chinese lithium and spodumene prices continued trending downward in the week to Dec. 16, as market sentiment remained bearish about the near-term outlook with rampant COVID-19 outbreaks.

Platts assessed battery-grade lithium carbonate at Yuan 550,000/mt on Dec. 16, on a delivered, duty-paid China basis, down Yuan 4,500/mt on the day, and Yuan 11,000/mt on the week.
Lithium carbonate prices had fallen Yuan 40,000/mt since its historic high of Yuan 590,000/mt on Nov. 11, according to S&P Global Commodity Insights data.
Offers for battery-grade lithium carbonate in the domestic market were indicated at around Yuan 550,000-560,000/mt on Dec. 16. Traders who are desperate to offload cargoes had indicated offers as low as Yuan 510,000-520,000/mt, a Chinese trader said.
Platts assessed battery-grade lithium hydroxide at Yuan 558,000/mt on Dec. 16, on a delivered, duty-paid China basis, down Yuan 1,500/mt on the day, and Yuan 4,000/mt on the week.
As the market enters the end of the year, many sources are lowering inventory levels for better cash flow. Sources were also away from the market while combating increasing COVID-19 cases in China after the government relaxed the zero-COVID policy.
"We just have to power through the next two months," a Chinese producer said.
Upstream, Platts assessed spodumene concentrate with 6% lithium oxide content (SC6) at $7,000/mt FOB Australia on Dec. 16, down $500/mt from the previous week.
A recent auction by Australian lithium miner Pilbara Minerals on Dec. 14-15 fetched a lower bid than the previous auctions, marking the first downtrend in several months following the cool off in lithium spot prices.
The closing bid was priced at $7,552/mt for a target grade of 5.5% lithium oxide, on an FOB Port Hedland basis, according to the company.
Sources feedback that the "base price was set too high," and many reflected that they were watching instead of participating in the bid.
Despite this high price, majority of the tradable values were pegged in the $6,000-$7,000/mt range on a FOB Australia basis in the week to Dec. 16.
"Seeing how lithium prices are falling these few days, the previous auction price already meant that the buyer is making a loss considering the processing costs," a Chinese lithium converter said, who added that the lower auction price and lower participation rate is within expectation.
A tonnage of spodumene at $7,552/mt is equivalent to Yuan 549,100/mt cost of producing lithium carbonate, considering Yuan 30,000/mt of processing fee.