Driven by demand from the battery market and higher production costs, lithium carbonate prices began to recover in 2003 and the upturn gained pace through 2006. FMC Lithium raised lithium carbonate prices by 9% in October 2004 and by a further 10-15% in August 2005. SQM reported that in the first quarter of 2006, prices were 40% higher than in the same period of 2005.
Leading producers were already operating near capacity levels in 2005 and tight lithium carbonate supplies suggest that prices will continue to rise through 2006/07. SQM forecasts that prices will rise by 25% in 2006, taking lithium carbonate prices back to the nominal 1996 level of around US$3,500/t. A similar rise in 2007 would take prices over US$4,000/t.
Further price rises may be tempered, however, by capacity expansions due on-stream by SQM in Chile (+11,500tpy lithium carbonate), and by Admiralty Resources in Argentina (+12,000tpy lithium chloride), in addition to projects planned in China (+45,000tpy
lithium carbonate). Lithium carbonate prices are therefore forecast to continue to rise through 2007, peaking at over US$4,000/t, before weakening to nearer US$3,000/t as new capacity comes on-stream in Argentina, Chile and China."
thoughts anyone?
ADY Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
