- Chinese lithium prices rally slows on emerging pessimism, consumer caution
- East Asian lithium prices carbonate fall on buyer resistance, bearishness in China
- Spodumene prices edge down on buyer resistance
“China’s lithium market was in a stalemate in the week to Thursday May 25, with sellers insisting on high lithium prices while consumers showed resistance, especially amid doubts over the upside for lithium prices in the near term.
“Sellers and buyers were divided. Sellers insisted on high lithium prices, while buyers were very cautious and were expecting prices to decrease in the near term. As such, consumers were mostly purchasing on a hand-to-mouth basis,” a Chinese cathode producer sources said.
Several other market participants concurred.
A Chinese lithium producer source said: “Consumers are buying spot material more often but in smaller quantities each time to reduce the risk of losing out should a potential price decrease emerge.”
Market participants said that although production in the lithium iron phosphate battery sector had improved, which results in better demand for lithium carbonate, such an improvement was considered to be still limited, and not strong enough to push lithium prices any higher.
“In previous weeks, the speculative activity among traders buoyed the market to more than where the true value really was. But now consumers are putting on more and more resistance and expecting prices to correct downward amid limited demand recovery,” a Chinese lithium trader said.
But on the other hand, sellers are still asking for high prices and holding on to material tightly despite growing buyer resistance.
“The sellers will try to aim for higher prices for as long as they can. But if demand can’t support the high prices, they will not be sustained,” a second Chinese lithium producer source said.
Fastmarkets’ assessment of lithium carbonate 99.5% Li2CO3 min, battery grade, spot price range exw domestic China was at 295,000-310,000 yuan ($41,696-43,816) per tonne on Thursday, narrowing from 270,000-321,000 yuan per tonne a week earlier.
The midpoint of the latest assessment is up by 2.37% week on week, compared with growth rates of between 10.61% and 20.61% in the preceding four weeks.
The bearish sentiment also clouded the lithium hydroxide market where market participants expected a downward correction for prices in the near term amid limited demand recovery.
“The recovery in the downstream nickel cobaltmanganese battery sector is not as good as what had been expected in the beginning of May. Consumers are feeding on stockpiles of lithium hydroxide that they built up at the end of April. There are also concerns that current prices may not be sustainable,” a third Chinese lithium producer source said.
Fastmarkets’ assessment of lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price range exw domestic China was 280,000-320,000 yuan per tonne on Thursday, narrowing from 270,000-326,000 yuan per tonne a week earlier.
The midpoint of the latest assessment is up by 0.67% week on week, compared with growth rates of between 2.13% and 24.17% four weeks earlier.
Bearishness in China drags down East Asian prices
Lithium carbonate prices in East Asia widened downward over the past week amid slow trading and buyer resistance, while the bearish sentiment in China also filtered through.
Multiple market participants also noted that lithium carbonate demand in general was much lower than that of lithium hydroxide and that consumers were resisting higher prices.
“No consumer is taking lithium carbonate prices at the same level as in the Chinese market. And even though some international sellers may want to push up prices closer to Chinese levels, it will meet a lot of resistance from consumers,” an Asian lithium trader said.
A fourth Chinese lithium producer source said: “Prices from international sellers are not changing as fast as in China’s domestic market. So they are still offering material at a noticeable discount to Chinese equivalents.”
In addition, with the emergence of the pessimism in China, a group of lithium carbonate sellers have lowered their prices ahead of any possible downtrend, the Asian lithium trader noted.
Fastmarkets’ assessment of lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices cif China, Japan & Korea was $31-36 per kg on Thursday, unchanged from a day earlier, but widening downward by $1 per kg from $32-36 per kg a week earlier.
Lithium hydroxide prices in East Asia maintained their premium over those for carbonate over the past week. Multiple deals and offers were reported at $42-48 per kg.
Market participants noted that the trading of lithium hydroxide was stable during the week in the region, though they also admitted that there might be limited room for lithium hydroxide prices to edge up since spot demand was not strong enough.
Fastmarkets’ assessment of lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price cif China, Japan & Korea was $42.00-48.00 per kg on Thursday, widening downward by $0.25 per kg from $42.25-48.00 per kg a day earlier, and widening downward by $2.00 from $44.00-48.00 per kg a week earlier.
Spodumene prices fall on buyer resistance
Spot prices for spodumene decreased in the fortnight to Thursday on consumer resistance, Fastmarkets learned.
“Spodumene prices of $5,000 per tonne are too high because the corresponding production cost of lithium salts is higher than current Chinese lithium prices. But $4,500 per tonne may be acceptable for lithium producers,” a fifth Chinese lithium producer source said.
Fastmarkets’ fortnightly assessment of spodumene min 6% Li2O, spot price, cif China was $4,000-4,510 per tonne on Thursday, narrowing downward by $540 per tonne from $4,000-5,050 per tonne two weeks earlier.
(20min delay)