Good News & Bad News, page-27728

• Uptick seen in lithium prices on the back of increased buying activities
• Market sentiments mixed with regards to near-term demand
• 25,000 mt of spodumene concluded for end-April shipment at $5,200/mt

Chinese lithium prices began inching up gradually in the week to April 21 after five months of the downtrend. Market sources attributed the recent price hike to increased buying in the market and price uptrend on the Wuxi Exchange which bolstered market sentiments.

Platts assessed battery-grade lithium carbonate at Yuan 165,000/mt on a DDP China basis April 21, up Yuan 5,000/mt on the day and Yuan 10,000/mt on the week.
Chinese lithium carbonate prices started falling from Yuan 578,000/mt on Nov. 21, 2022, on the back of tepid midstream and downstream demand from the electric vehicles sector as well as build up of inventories.
Prices of lithium carbonate had taken an upturn at the start of the week, increasing steadily from Yuan 152,000/mt April 17 to reach Yuan 165,000/mt at the end of the week.
Mainstream tradable levels were heard at around Yuan 120,000/mt at the start of the week and gradually increased to Yuan 200,000/mt April 21. Sparse offers were heard in the range of Yuan 170,000-200,000/mt.
Prices of lithium carbonate futures had jumped to over Yuan 200,000/mt on the Wuxi Exchange at the start of the week, which spurred buying activities especially among traders. Prices had since fallen back to around Yuan 170,000/mt range for the May-August futures contracts.
Producers were cautious and were holding back on offers as many were unsure if the recent hike was supported by demand fundamentals.
"Wuxi is up but the physical market is still weak, downstream consumers are not restocking," an international trader said.
However, many market sources held the view that demand has still not fully recovered.
"Producers just hope that prices don’t drop anymore… no one knows what to do when [prices are] too volatile," a lithium converter said.
"We are waiting to see now because the market is too volatile. 15 days later we won’t know what the prices will be like," said a Chinese battery maker who reported minimum production rate of 30%.
Inventory levels at some cathode makers were reported at 4-10 days, while some lithium converters were holding on to at least two months worth of inventories currently, sources shared.
Market sources believe there might be a slight pick up in procurement activities from cathode makers who were running low on inventories, although out of as-neededbasis until demand has fully resumed.
Platts assessed battery-grade lithium hydroxide at Yuan 205,000/mt DDP China basis on April 21, up Yuan 5,000/mt on the day, but down Yuan 15,000/mt on the week.
In general, market sentiments remained mixed, many are on the sidelines while waiting for clearer market movements.
"There are very polarized views between the bulls and the bears," a Chinese producer said.
Upstream, Platts assessed spodumene concentrate with 6% lithium oxide content at $4,200/mt FOB Australia April 21, up $200/mt on the week.
A 25,000 mt of 6% lithium oxide content spodumene was heard concluded for the end-April shipment at $5,200/mt.
"No matter domestic or international lithium producer, this spodumene price would not fetch any margins, it will be a loss," a Chinese lithium converter said.
Spodumene at $5,200/mt is equivalent to an estimated cost of Yuan 353,415/mt for producing battery-grade lithium carbonate, inclusive of 13% VAT and a processing cost of Yuan 30,000/mt. At the current spot price of Yuan 165,000/mt, it represents a significant profit margin loss for refiners.
"That particular consumer may have urgent need to cover," the converter added.
Tradable levels vary greatly in the market between $2,500-$5,500/mt. The lowest tradable was heard indicated at $2,500/mt, although most congregated at $3,000-$4,000/mt levels in the week to April 21.
An indicative offer of 6% lithium oxide material was heard at $2,500/mt and firm offers were heard $3,000/mt and $3,800/mt in the Chinese domestic market.