GLOBAL LITHIUM WRAP: Strong demand for hydroxide supports Asia price gains Battery-grade lithium hydroxide prices in Asia moved up over the week ended Thursday June 3 against the backdrop of continued tight supply and firm buying appetite.
Global lithium hydroxide supply remains tight with upstream feedstock tightness hurting China’s ambitions for lithium chemical operation ramp-ups.
Fastmarkets’ assessment for spodumene min 6% Li2O, cif Chinaedged higher to $650-720 per tonne on May 26, up by 0.74% from $640-720 per tonne one month ago.
On top of that, market participants hold an optimistic demand outlook for nickel-cobalt-manganese (NCM) lithium-ion batteries, especially those for nickel-rich types that feed on lithium hydroxide and they believe China's demand strength has also been a critical driver.
China continued to lead the momentum for lithium hydroxide prices in Asia, with security of units remained a problem for some consumers.
“All leading cathode materials producers in China are operating at full capacities,” a consumer told Fastmarkets. “Robust demand from the electric vehicle [EV] battery sector has continued to filter to the upstream value chain.”
NCM 811 (Ni:Co:Mn:8:1:1) cathode production in China is expected to increase to 30% this year from 20% last year, according to Vicky Zhao, senior analyst of Fastmarkets’ battery raw materials research team.
“For the majority of consumers like us, security of lithium hydroxide is the priority,” the same consumer said. “It is not about prices anymore.”
Lithium carbonate prices in Asia remained unchanged, however, and some market participants are still wary of a short-term correction due to the seasonal increase in production in Qinghai province in China.
“Seasonal increase of operations in Qinghai province is easing the previous supply tightness of lithium carbonate in China over the winter,” a trader said. “That is resulting in a widening gap between lithium hydroxide and carbonate for now.”
The output for technical-grade lithium carbonate produced from brine in salt lake areas, such as Qinghai province, is higher in the summer as opposed to winter when salt lakes are frozen.
Battery-grade lithium hydroxide in China was traded at a premium of 7,000 yuan per tonne over the equivalent grade of lithium carbonate on June 3, while both chemical prices were almost at parity on May 20, according to Fastmarkets’ data.
Europe, US spot lithium complex underpinned
Prices in Europe and the United States continued to be supported by tight availability of technical-grade compounds and exacerbated by logistics disruption due to a lack of container space availability, sources said.
“It is really challenging in logistics right now with the misplacement of containers affecting shipments… We are facing delays but in our particular case we are not that much affected as we have inventories abroad,” a lithium producer active in Europe and Asia said.
“This has created some opportunities in the market for us and it has benefited the spot market as people are trying to react to this reality and trying to secure material. However, lithium prices went up for fundamental reasons rather than this transitory impact,” the same producer said.
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