Lithium carbonate offered at Yuan 520,000/mt Carbonate-hydroxide...

• Lithium carbonate offered at Yuan 520,000/mt
• Carbonate-hydroxide spread narrows to Yuan 75,000/mt

Chinese lithium prices continued to break records on tighter supply and stronger downstream demand in the week to Feb. 25.

S&P Global Platts assessed battery-grade lithium carbonate at Yuan 475,000/mt Feb. 25 on a delivered, duty-paid China basis, up Yuan 25,000/mt week on week.
Trades were heard concluded in the range of Yuan 460,000-480,000/mt, although most were concentrated at the Yuan 475,000/mt level.
Offers for battery-grade lithium carbonate were heard at up to Yuan 520,000/mt but were deemed too expensive by market sources.
Market participants also noted that there was limited availability of lithium carbonate in the spot market, with many factories focusing on fulfilling the obligations under their existing long-term contracts as they did not have sufficient spot material to sell.
“Downstream consumers may be buying aggressively now even if they do not actually need the material to produce,” a Chinese producer said, adding that there could be some buyers who were restocking on expectations of further price hikes.
A trader said, “There has been little respite for carbonate prices, and at this rate of increase, it is likely that prices will reach Yuan 500,000/mt and above.”
Platts assessed battery-grade lithium hydroxide at Yuan 400,000/mt Feb. 25, on a delivered, duty-paid China basis, up Yuan 30,000/mt week on week.
The carbonate-hydroxide spread narrowed slightly to Yuan 75,000/mt, down Yuan 5,000/mt from the previous week.
“The smaller price difference between carbonate and hydroxide makes it seem that carbonate is much cheaper now, but the reality is that spot supply is still very tight,” another Chinese producer said.
Production capacity of lithium salts has been curtailed by a shortage in raw materials, while upstream resource extraction is still slow, market participants said.
Spodumene supply remained scarce, which kept tradable values well-supported, with Q2 2022 term contracts heard tradable close to $3,000/mt, a producer source said.
“Spodumene supply is expected to tighten further and people will be reluctant to sell,” a consumer said.
Platts assessed spodumene concentrate with 6% lithium oxide content (SC6) at $4,500/mt FOB Australia Feb. 25, unchanged week on week.
Looking ahead, market participants maintained a bullish outlook towards lithium prices but were concerned about the long-term impacts on the market.
“If prices keep going up, it’s not beneficial for the industry and customers are already at their limit for accepting any price increases,” an analyst said.