GLOBAL LITHIUM WRAP: Cheaper material offered by smaller producers weighs on Chinese battery-grade carbonate, hydroxide prices

Lower-cost material availability alongside persistently low consumption pushed down battery-grade lithium carbonate and hydroxide prices ex-works China on Thursday June 7, while prices in the rest of the world were steady week on week.

  • Battery-grade lithium carbonate and hydroxide prices soften in China 
  • Continued deceleration in consumption alongside cheaper material available in the market remain the two major factors behind the falling prices 
  • Seaborne lithium compound market subdued, with producers resisting consumer calls for lower prices 
  • European, US prices unchanged, with most consumers well-supplied on long contracts

The Chinese domestic spot battery-grade lithium carbonate market softened for the second consecutive week on Thursday, attributed mainly to some lithium producers offering cheaper material to the market alongside slow trading activity.

Metal Bulletin last assessed the Chinese domestic spot battery-grade lithium carbonate price (min 99.5% Li2CO3) at 126,000-130,000 yuan ($19,704-20,330) per tonne on Thursday, down by 5,000 yuan per tonne week on week.

Consumption of lithium compounds within China remains weak despite a pick-up in activity this week. Producers spoken to by Metal Bulletin anticipate stronger prices in the late summer while downstream consumers anticipate softer prices due to higher availability in China could continue to pressure prices lower until the end of the summer or the end of the year.

Smaller lithium carbonate producers in China are lowering their offer prices to encourage battery makers to buy their material thus qualifying it as suitable for battery use, market participants told Metal Bulletin. The producers also have cash pressures to fund their production plans, the sources added.

“Our understanding is that the material being sold below 130,000 yuan per tonne in China come mainly from the smaller battery-grade producers who seek to qualify their material in battery applications since their material can’t be used in all battery cathodes,” a Chinese lithium producer told Metal Bulletin.

“Some of them need to generate cash to keep operating and we believe this [price dip] will be temporary because it happens every year,” the producer added.

“We keep purchasing material but there is strong sentiment the market will keep moving down due to the larger volumes of material being produced within China,” a battery cathode producer told Metal Bulletin.

“Lithium prices in China typically pick up in the third quarter of the year as battery and cathode manufacturers have to fulfil their targets in order to receive the governmental subsidies. Therefore, prices will probably pick up again in the third quarter of 2018,” a second lithium producer told Metal Bulletin.

The lower carbonate prices and subdued trading activity has also affected battery-grade lithium hydroxide spot prices, which moved slightly down on Thursday’s assessment. 

Battery-grade lithium hydroxide monohydrate (min 56.5% LiOH.H2O) prices fell 1.1% to 140,000-142,000 yuan per tonne on Thursday from 140,000-145,000 yuan per tonne last week, according to Metal Bulletin’s market assessment.

Asian seaborne market steady
The cif China, Japan and Korea battery-grade lithium carbonate and hydroxide markets were unchanged week on week on Thursday, with little trading activity reported after sellers resisted calls for lower prices.

Metal Bulletin’s battery-grade lithium carbonate (min 99.5% Li2CO3) and hydroxide (min 56.5% LiOH.H2O) prices remained at $18-20 per kg and $19-20 per kg on a cif China, Japan and Korea basis respectively on Thursday.

“We have kept unchanged our seaborne cif China, Japan and Korean prices. However, we haven’t been able to sell any material this week as consumers in the region are pushing for lower prices,” a lithium trader told Metal Bulletin.

“The seaborne cif China, Japan and Korea market remains very slow and consumers remain largely covered by the long-term contracts,” a third lithium producer told Metal Bulletin.

Europe, US prices unchanged
The European and US markets remained quiet week on week with prices steady across the region.

European and US battery-grade lithium carbonate and hydroxide spot market prices are $17.50-20 per kg and $19-20 per kg respectively on a delivered, duty-paid basis, according to Metal Bulletin’s Thursday market assessment.

“We are sold out for much of the year, selling pretty much everything under a contract basis,” a fourth lithium producer said. “Although we do keep some stocks to sell material in the spot market, we had no inquiries over the past week.”

“We have been mainly active with technical and industrial grade materials, offering our battery-grade lithium hydroxide and carbonate to Europe, the US and Asia. However, no sales over the course of the week as consumers keep holding back on our offering prices,” a trader told Metal Bulletin.

“Our prices won’t go below $18 per kg for any of the two battery-grade materials, but downstream consumers keep looking for lower prices,” the trader added.

Metal Bulletin global lithium prices

See the Metal Bulletin June trade log for battery-grade lithium carbonate in China including trades, bids and offers reported to Metal Bulletin.

Learn more about Metal Bulletin's lithium pricing methodology here and see the lithium price spotlight here.

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