China’s lithium carbonate price rebounds amid futures strength

China’s spot lithium carbonate prices rebounded in the week to Thursday October 12 due to support from a surge in the lithium carbonate futures contract on Guangzhou Futures Exchange (GFEX), the first gain since the end of August, sources said

  • China’s lithium hydroxide prices still down on muted demand
  • East Asian lithium prices lower on weak demand and previous weakness in China
  • European, US lithium prices lower on scarce spot demand

The most traded January 2024 lithium carbonate contract on GFEX surged to close at 164,950 yuan ($22,596) per tonne on Thursday from the day’s opening at 157,100 yuan per tonne.

This lithium carbonate contract price has been on a steady uptrend after China’s Golden Week holiday from September 29 to October 6. The contract opened at 150,000 yuan per tonne and closed at 151,900 yuan per tonne on Monday October 9, the first trading day after the holiday.

Offers for lithium carbonate rose on Thursday following the strong futures performance on the same day, Fastmarkets learned, while prior to Thursday, market participants noted a stable market.

“Before Thursday, the prices for lithium carbonate were very stable, not much different from the week before China’s golden week holiday, with battery-grade lithium carbonate prices around 165,000 yuan per tonne,” a Chinese lithium trader said. “But just today, following the futures strength, the offer prices for battery grade lithium carbonate jumped to 180,000 yuan per tonne, although no trades have been concluded at this level.”

In addition to strength in the futures market, market participants also noted that prior to Thursday, lithium sellers in China already stopped further lowering offer prices, keeping the lithium prices steady and ending the downtrend prior to the holiday.

“Lithium carbonate sellers are not willing to further lower prices because they expect that there could be a round of restocking in the fourth quarter, which typically has the strongest demand of the year,” a Chinese lithium producer source said.

However, spot market fundamentals remained weak, with consumers continuing to purchase only on a hand-to-mouth basis.

“Downstream cathode producers are still keeping their lithium carbonate inventories at a low level, enough for only around three days of production. They only purchase on an as-needed basis with only small volumes each time,” a second Chinese lithium producer source said.

Fastmarkets’ price assessment of lithium carbonate 99.5% Li2CO3 min, battery grade, spot price range exw domestic China was 163,000-170,000 yuan per tonne on Thursday, narrowing upward by 3,000 yuan per tonne from 160,000-170,000 yuan per tonne on the previous assessment on September 28.

The latest assessment was 147,000-1550,000 yuan per tonne lower from 310,000-325,000 yuan per tonne on June 15 when the overall price downtrend started.

Lithium hydroxide market participants continued to note muted demand for the material given a sluggish nickelcobaltmanganese (NCM) battery sector in China, which weighed down on China’s lithium hydroxide prices.

“There is almost no demand for lithium hydroxide from the consumer side. While the downstream NCM battery sector remains sluggish, even traders are not active with speculative activity in the hydroxide market,” the second Chinese lithium producer source said. “Without demand, there will be no buyers, regardless of how low the lithium hydroxide prices are.”

Fastmarkets’ price assessment of lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price range exw domestic China was 148,000-160,000 yuan per tonne on Thursday, down by 2,000-10,000 yuan per tonne from 150,000-170,000 yuan per tonne on the previous assessment on September 28.

East Asian spot prices extend loss on weak demand and previous weakness in China

Spot lithium prices in East Asia continued to fall in the week to Thursday, with sources citing downward pressure from ongoing weak demand and the weakness in the China’s domestic market.

“The market is looking very bearish. A lot of the East Asian consumers want to destock their lithium inventories in the fourth quarter,” an Asia-based lithium trader said.

The second Chinese lithium producer source told Fastmarkets that the lithium hydroxide demand in east Asia was also weak, with the consumers in the region sitting on large supplies of nickel-rich NCM batteries.

“East Asian consumers have long-term supplies which are more than enough to meet actual demand,” a third Chinese lithium producer source said.

In response, multiple Chinese lithium producers acknowledged it was difficult to make spot deals in the current market climate, with buyers wanting prices fully equal to those in China’s domestic market.

“Many lithium hydroxide sellers have large stocks, so they have to compete with each other and offer more competitive prices to attract buyers,” an East Asian consumer source said.

Fastmarkets’ daily price assessment of lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price cif China, Japan & Korea was $23-25 per kg on Thursday, unchanged from a day earlier, but narrowing down by $1 per kg from $23-26 per kg a week earlier.

Fastmarkets’ daily price assessment of lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices cif China, Japan & Korea was $23.00-24.50 per kg on Thursday, unchanged from a day earlier, but narrowing down by $1.50 per kg from $23.00-26.00 per kg a week earlier.

Europe, US lithium spot prices continue downtrend amid subdued spot demand

Spot prices for lithium in Europe and the United States continued to post losses over the week to Thursday, with weak demand from end consumers continuing to weigh on offer prices, sources said.

Following the holiday period in China sources kept a watchful attitude for any sign of demand recovery in the European and North American regions, but spot demand has remained week so far and prices continued to drop.

“Realistically if you want to conclude a spot transaction at this very moment, a price in the low $20s has to be negotiated,” a European distributor said.

A second market participant active internationally indicated that there is still some weakness in other markets that has yet to filter through to Europe and the US regions following previous decreases in the domestic Chinese market and that buyers in Europe continue to mostly rely on their long-term contracts.

“I expect that during the fourth quarter there will be a new round of restocking,” the market participant said.

Fastmarkets’ weekly price assessment of lithium carbonate 99.5% Li2CO3 min, battery grade, spot price ddp Europe and US was $21-23 per kg on Thursday, down by $3-4 per kg from $24-27 per kg a week earlier.

Keep up to date with the latest lithium prices, data and forecasts on our dedicated lithium price page.

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