Good News & Bad News, page-8832

• Lithium carbonate offers reach Yuan 560,000/mt
• Thin liquidity in the spot market

Chinese lithium prices rose slightly March 11 as sellers maintained their high offers amid supply uncertainties and stable demand from the new energy vehicle, or NEV, sector.

Platts assessed battery-grade lithium carbonate at Yuan 505,000/mt March 11 on a delivered, duty-paid China basis, up Yuan 5,000/mt week on week.
Trades were heard concluded in the range of Yuan 500,000-520,000/mt, while offers for battery-grade lithium carbonate were heard at up to Yuan 560,000/mt but were deemed too expensive by market sources.
“Downstream industries are still facing a shortage but there is quite a strong price resistance by consumers,” a producer source said.
Market participants also noted that some precursor makers had indicated their intention to stop procurement if prices of battery-grade lithium carbonate exceeded Yuan 500,000/mt.
“Battery factories are slowing down their planned capacity increases to prevent prices from going up at a faster rate,” an analyst said, adding that the profit margins of battery makers had been declining.
S&P Global Commodity Insights assessed battery-grade lithium hydroxide at Yuan 480,000/mt March 11, on a delivered, duty-paid China basis, up Yuan 5,000/mt week on week.
The price of battery-grade lithium hydroxide has risen more quickly than carbonate in recent weeks as many big factories were currently undergoing maintenance, resulting in a tighter supply of hydroxide, market sources said.
Many consumers have shifted toward using newer models of NEVs that require more hydroxide to manufacture, a Chinese producer added.
The carbonate-hydroxide spread remained stable at Yuan 25,000/mt, amid thin liquidity in the spot market.
“I feel that prices of lithium carbonate and hydroxide won’t be too different in the time to come,” another Chinese producer commented.
According to market participants, consumers were also concerned that there might be more restrictions on Russian exports soon and were looking for alternative supplies in advance.
S&P Global Commodity Insights assessed spodumene concentrate with 6% lithium oxide content (SC6) at $5,000/mt FOB Australia March 11, unchanged week on week.
Spot availability of spodumene remained scarce, which kept tradable values well-supported around $5,000/mt.
The sharp increase in salt prices is unhealthy for the whole industry and will likely hinder the market from reaching the government’s penetration targets for electric vehicles in China, market sources said.
“Right now, the electric vehicle penetration rate in China is only around 10%. If prices keep rising, more players will exit the market,” a Chinese analyst said.