China’s lithium carbonate prices fall below 100,000 yuan per tonne amid futures volatility

Spot lithium prices in China continued on a precipitous downtrend, with battery-grade lithium carbonate prices trending below 100,000 yuan per tonne over the week to Thursday December 7, following increased volatility in the futures market and muted demand

East Asian markets also reported limited spot demand ahead of the year’s end, while the lithium prices there tracked the same weakness in China.

An ongoing downtrend in China’s lithium futures market

The most-traded January 2024 lithium carbonate futures contract on the Guangzhou Futures Exchanged (GFEX) dropped to 92,450 yuan ($12,945) per tonne at the close on Wednesday December 6, down by 13,750 yuan per tonne from Thursday November 30’s close at 106,200 yuan per tonne.

“The ongoing [downtrend] in China’s lithium futures market has added great downward pressure to the spot lithium market. While there is barely any spot demand, the spot prices are closing following the futures prices,” a Chinese lithium producer source said.

Futures prices on Thursday recouped some of the losses made on Wednesday, with the GFEX January 2024 lithium carbonate futures contract price rising to close at 95,600 yuan per tonne on Thursday.

“The strength in the futures market on Thursday buoyed sentiment among some traders and some started to raise their offer prices for lithium carbonate, while others even held units in tight hands,” a Chinese lithium trader said. “But I don’t think the futures strength on Thursday means the beginning of a rebound in lithium prices, because lithium demand still remains extremely weak.”

Spot lithium demand remained muted over the recent week, with market participants along the supply chain confirming that consumers were only relying on their long-term deliveries.

“It’s the end of the year. To avoid holding excess inventories for better annual financial performance, consumers have been keeping their lithium inventories at a minimum level. Some cathode makers have lithium inventories only sufficient for one week’s worth of production,” a Chinese lithium producer source told Fastmarkets.

Market participants widely expressed that the lithium weakness the Chinese market could at least last until China’s Lunar New Year holiday, which takes place from February 10-17 2024.

Fastmarkets’ weekly price assessment of lithium carbonate 99.5% Li2CO3 min, battery grade, spot price range exw domestic China was 90,000-100,000 yuan per tonne on Thursday, down by 16,000-25,000 yuan per tonne from 106,000-125,000 yuan per tonne a week earlier.

Fastmarkets’ weekly price assessment of lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price range exw domestic China was 100,000-110,000 yuan per tonne on Thursday down by 10,000-12,000 yuan per tonne from 112,000-120,000 yuan per tonne a week earlier.

The spot lithium market in East Asia has remained inactive in the past week

The spot lithium market in East Asia remained inactive over the past week with consumers feeding mainly on long-term deliveries, while the lithium prices also trended downward following the weakness in China.

Multiple sources told Fastmarkets that consumers in East Asia barely had any demand for spot lithium while they were also trying to reduce inventories ahead of the year’s end. Consequently, even offers for spot lithium units were rare over the recent week.

“The consumers in East Asia are well stocked and they are not buying anything at this time of the year although we have actively approached them to offer spot lithium salts,” an international lithium producer source said.

A second Chinese producer source said, “our East Asian customers are even asking for lower volumes of lithium salts from their long-term deliveries. They are only picking up 70-80% of the previously agreed volume.”

Fastmarkets’ daily price assessment of lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price cif China, Japan & Korea was $17-18 per kg on Thursday, unchanged from a day earlier, but down by $1 per kg from $18-19 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 $17-18 per kg on Thursday, unchanged from a day earlier, but down by $1 per kg from $18-19 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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