MinRes to auction lithium in quest for ‘real price transparency’...

MinRes to auction lithium in quest for ‘real price transparency’

Brad ThompsonReporter
Mar 27, 2024 – 9.02pm




Mineral Resources will start selling lithium on a digital auction platform after fetching a much higher premium for a recent sale than the prevailing spot price for the battery-making material.
MinRes, led by billionaire Chris Ellison, said it would move to the digital platform to “generate real price transparency” in a market dominated by China.

MinRes lithium boss Joshua Thurlow says the price of Australian spodumene concentrate ha gone up 37 per cent over the past two months. Trevor Collens
The Perth-headquartered company and New York-listed Albemarle have both sold spodumene concentrate from mines in Western Australia at a premium to the spot price recently.
The sales come amid a revival in lithium prices that UBS has linked to better-than-expected demand in March and short-term supply disruption.
MinRes achieved a price of $US1300 ($1993) a tonne on a 6 per cent spodumene concentrate basis compared to a spot price of around $US1075 a tonne.

The sale was not by auction, and MinRes has not decided which digital platform it will use in following Pilbara Minerals and Albemarle down the auction route.
The cargo of about 20,000 tonnes was sold to a buyer in China and came from the Mt Marion mine MinRes owns in partnership with China’s Ganfeng.
MinRes lithium boss Joshua Thurlow said the company had seen the price of Australian spodumene concentrate increase 37 per cent over the past two months.
“Last week, MinRes sold spodumene concentrate at $US1300 a tonne, more than 10 per cent higher than the current spot price,” he said.
“It’s clear the market is waking up to the future demand for lithium that is required for the global energy transition as long-awaited supply projects slow down or fail to materialise.
“MinRes is now looking at putting parcels on a digital auction platform, so we can generate real price transparency.”

Set to capitalise

Mr Thurlow said most spodumene produced in WA was locked up in long-term offtake agreements whereas MinRes had uncontracted tonnes and could capitalise on any increase in demand from chemical and battery producers.
When lithium prices started to go into freefall last October, MinRes claimed markets were being manipulated to suppress prices in a sector dominated by battery chemical makers in China.
The comments came after the Guangzhou Futures Exchange started offering futures contracts on lithium carbonate supply in mid-2023. Some market participants said the Guangzhou futures had been a factor in undermining sentiment around prices.
Albemarle is understood to have achieved a price well above spot via an auction run through London Metals Exchange partner Metalshub.
The cargo was sold to a buyer in China and came from the Wodgina mine in WA co-owned by Albemarle and MinRes.

Although Albemarle has yet to comment, Global Lithium chief executive Ron Mitchell said on Tuesday that the Chinese buyer paid $US1246 a tonne including taxes for the 10,000 tonne Albemarle offering. The sale implied a price of about $US1200 a tonne on a 6 per cent spodumene concentrate basis and minus taxes.
Mr Mitchell, the inaugural chairman of the LME’s lithium committee, was speaking at the Future facing Commodities conference in Singapore.
Sales via auction

Albemarle said this month that it was moving to sell a portion of its lithium via auction to help make an opaque market more transparent.
ASX-listed pure play lithium producer Pilbara Minerals pioneered sales of the battery making ingredient through digital auction platform GLX in 2021.
Pilbara Minerals this month said it would accept a pre-auction offer price of $US1106 a tonne for 5000 tonnes of 5.5 per cent spodumene concentrate, or $US1200 a tonne on a 6 per cent grade basis.

UBS said Albemarle had become the second lithium player after Pilbara Minerals to conduct a bidding event for spodumene.
“Based on our channel check, Albemarle’s bidding event is only open to lithium refiners instead of traders and participation is by invitation,” UBS said last week in a note to clients.
“The bidding product is Wodgina spodumene concentrate at its defined warehouse in China, and will be picked up within 30 days after the bids.”