A downtrend in Chinese domestic lithium prices led values in other markets to decline further in the seven days to March 28, with market sources seeing more room for decreases in the near term.
Lithium carbonate fell $500/mt day on day and $2,500/mt week on week to $57,000/mt on March 28. Lithium hydroxide was unchanged on the day but tumbled $3,500/mt on the week to $66,000/mt on March 28.
The prices reflect the spot value of battery-grade material on a CIF North Asia basis, referring to deliveries to the main ports in China, Japan, and South Korea. Lithium carbonate, however, is normalized to deliveries at the Shanghai port.
Several sources have been hearing about offers at even lower prices than the assessed values, indicating that prices could keep falling. Market participants outside China “are not stupid, they'll definitely want to pay based on Chinese domestic prices,” said a trader source, who was offering battery-grade lithium carbonate as low as $55,000/mt, “but nobody is buying.”
A consumer source heard about battery-grade lithium carbonate being offered by a trader below $50,000/mt for shipping outside Asia, and battery-grade lithium hydroxide at $60,000/mt.
Many buyers have been postponing purchases, while eyeing lower priced transactions in the future, market sources said. All sources concurred that the current downtrend in seaborne prices has been driven by the Chinese plunge.
However, despite China’s current lithium refining overcapacity, the raw materials’ market balance is still fragile. Although plenty of African direct shipment ore has been flowing into China, it’s still unclear if that material will be consistently available, since most of these operations are artisanal, according to market sources.
“At least it's a clearer picture than previously,” said a buyer source outside Asia, citing uncertainties from the previous weeks about the possible ripple effect of China’s price downtrend in other regions.
He purchased some spot volumes of technical-grade lithium hydroxide from Chinese origin at $55,000/mt. That's the same price he paid for technical-grade lithium carbonate from South American origin. “Chinese sellers are probably offering [technical-grade carbonate] lower than this,” he said.
Platts’ $57,000/mt assessment for battery-grade lithium carbonate CIF North Asia was equivalent to Yuan 443,062/mt on a DDP China basis, including 13% value-added tax, port and logistic costs, based on S&P Global Commodity Insights' import-parity calculation.
The DDP China lithium carbonate price was assessed at Yuan 240,000/mt March 28, meaning seaborne prices were nearly double Chinese domestic prices. The dollar was assessed at Yuan 6.8749 at 4:30 pm Singapore time.
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