Buyer caution weakens China’s battery-grade lithium carbonate price

China’s battery-grade lithium carbonate prices slowed further in the week to Thursday November 17 amid caution among buyers following a decline in local futures prices

  • China’s battery-grade lithium hydroxide prices unchanged amid buyer caution
  • Seaborne East Asian lithium hydroxide prices up on tightness, lithium carbonate prices flat
  • European, US battery-grade lithium prices jump to catch up with Asia

The most-traded December lithium carbonate contract on China’s Changzhou Zhonglianjin E-Commerce platform opened at 609,000 yuan ($85,242) per tonne on Monday, before dropping by 34,000 yuan per tonne to close at 575,000 yuan per tonne on the same day.

The contract has hovered around 575,000-580,000 yuan per tonne since then.

Fastmarkets’ price assessment for lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price range, exw domestic China was 590,000-605,000 yuan per tonne on Thursday, widening upward by 5,000 yuan per tonne from 590,000-600,000 yuan per tonne a week earlier.

The price assessment for lithium hydroxide monohydrate, LiOH.H2O 56.5% LiOH min, battery grade, spot price range, exw domestic China was 580,000-590,000 yuan per tonne on Thursday, unchanged from a week earlier.

“Although the sharp fall in the futures prices does not have any immediate impact on the spot prices, it has direct impact on the market sentiment,” a Chinese lithium trader said.

“As for buyers, they have become more cautious after the sharp fall, and are in no hurry to place orders before there are clear signs of price movement in the spot market. Some buyers have also tried to press down offers of battery-grade lithium carbonate prices to 580,000 yuan per tonne,” he added.

In addition, talk of reduced production among downstream battery makers and cathode materials makers had spread throughout the market, which fueled further caution among lithium consumers.

As a result, market participants reported that lithium prices in China were caught in a stalemate, with limited room to trend upward.

But the ongoing tightness in the spot market continued to support lithium prices in China, market participants said.

“The spot market is tight, and there is no need for lithium sellers to boost sales by lowering the offers at the moment, despite the current caution and resistance among buyers,” a Chinese lithium producer source said.

“As brine-origin production in China’s Qinghai province also shrank due to the lower winter temperatures, the lithium market has got even tighter,” a second Chinese lithium producer source said.

East Asian battery-grade lithium hydroxide market strengthens

Battery-grade lithium hydroxide prices maintained an upward trend over the past week, with market participants continuing to report limited spot availability.

Fastmarkets’ daily price assessment for lithium hydroxide monohydrate, LiOH.H2O 56.5% LiOH min, battery grade, spot price, cif China, Japan & Korea was $83-86 per kg on Thursday, unchanged since Monday, and widening upward by $1 per kg from $83-85 per kg on November 11.

“Lithium hydroxide supply remains tight, and it continues to support the spot price. Due to the tightness, consumers in East Asia can accept the prices easily,” a third Chinese lithium producer source said.

“In addition to current tightness, the Chinese yuan has been appreciating recently, which also sends some strength to the lithium hydroxide prices in East Asia,” a fourth Chinese lithium producer source said.

On the other hand, the lithium carbonate prices in the seaborne East Asian market held steady in the past week, due to lack of liquidity.

The corresponding daily price assessment for lithium carbonate, 99.5% Li2CO3 min, battery grade, spot prices, cif China, Japan & Korea was $80-82 per kg on Thursday, unchanged since November 8.

Despite the low liquidity and weaker demand for lithium carbonate than lithium hydroxide in the seaborne market, market participants did not see any weakening in lithium carbonate prices.

“There is more focus on producing lithium hydroxide [to cater for the strong demand and prices in the seaborne East Asia], availability of lithium carbonate is worsening, and this will support lithium carbonate prices,” a sales representative of a South American lithium producer said.

Europe, US battery-grade lithium spot prices track Asian markets higher

Battery grade lithium spot prices in Europe and the United States moved higher in the week to Thursday, tracking the ongoing strength in the domestic China and the seaborne Asia markets, the more liquid markets for battery applications, sources said.

On the other hand, technical-grade lithium carbonate and hydroxide compounds held steady over the past week with sources reporting no buying interest above current levels.

“The European market is slow to digest any further price increase and industrial buyers in the current economic outlook in the region are reluctant to pay any higher price,” a market source active in Europe said.

Representatives of two major lithium producers with operations in South America said that they do not see any difference at present in terms of pricing for battery-grade lithium across various regions, and they would simply reallocate the material where there is an arbitrage opportunity to take advantage of.

“I would not sell at a lower price than what I can get in seaborne Asia,” a lithium producer source active in both Europe and seaborne Asia said, talking about the lack of pricing differential for battery-grade applications between the European and seaborne Asia markets.

The same source also acknowledged that the European lithium market is still at its infancy for the battery sector and is very illiquid at the moment.

Fastmarkets assessed the price of lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price ddp Europe and US at $83-86 per kg on Thursday, up by $3-4 per tonne from $80-82 per tonne a week earlier.

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