Lithium prices in the international markets remained mostly rangebound amid thin liquidity in the run up to the holiday, which takes place from February 10-17.
China continues to top up lithium inventory
Chinese lithium consumers continued to top up inventories of battery-grade lithium carbonate over the recent week in preparation for their operation during the LNY holiday, especially with an imminent halting of domestic logistics because of the holiday.
However, the restocking orders for battery grade lithium carbonate continued to come in relatively small volumes because consumers were afraid to over purchase the material due to a lack of clarity on post-holiday demand, sources said.
Fastmarkets’ weekly price assessment of lithium carbonate 99.5% Li2CO3 min, battery grade, spot price range exw domestic China was 95,000-100,000 yuan ($13,349-14,052) per tonne on Thursday, up by 2,000 from 93,000-98,000 yuan per tonne a week earlier.
On the other hand, the spot availability of technical grade lithium carbonate was tightened, since the transport out of China’s Qinghai province, where most technical grade lithium carbonate producers feeding on brine are based, has already halted.
“The transport from Qinghai has already stopped, earlier than the halt of transport in other provinces, because most truck drivers have already left for their hometowns for the holiday,” a lithium producer source based in Qinghai told Fastmarkets. “Consequently, the technical grade lithium carbonate is tight in the market.”
Fastmarkets’ price assessment of lithium carbonate 99% Li2CO3 min, technical and industrial grade, spot price range exw domestic China was 86,000-90,000 yuan per tonne on Thursday, narrowing upward by 1,000 yuan per tonne from 85,000-90,000 yuan per tonne a week earlier.
In addition, multiple lithium sellers reportedly held off on making sales to try to push up prices, lending support to the spot lithium prices, sources said.
“The lithium sellers are in no rush to make sales because of slowing domestic logistics. In addition, some of them are betting on post-holiday restocking which could further support prices”, a Chinese lithium trader said.
The strength of lithium carbonate prices lent some support to lithium hydroxide prices, while the liquidity of hydroxide remained thin amid weak consumer demand, sources said.
Despite the restocking and seller’s attempts to push up prices, the market fundamentals of carbonate and hydroxide remained sluggish, capping the upside room in prices over the week, sources told Fastmarkets.
Fastmarkets’ price assessment of lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price range exw domestic China was 81,000-86,000 yuan per tonne on Thursday, up by 1,000 yuan per tonne from 80,000-85,000 yuan per tonne from a week earlier.
East Asian lithium prices remain rangebound
Spot lithium prices in East Asia remained mostly rangebound over the recent week, with spot liquidity slowing down in the run up to the LNY holiday and Chinese lithium prices fluctuating within a narrow range.
“We haven’t had any spot deals of hydroxide over the recent week. Because of the Lunar New Year holiday and disruption on transport, we don’t have time to ship anything before the holiday. So, while there were a few enquiries over the week, there were no deals,” a Chinese lithium producer source said.
Multiple other sources also acknowledged that the spot market was quiet over the recent week and expected it to be even more inactive in the subsequent week.
Despite the thin liquidity, market participants noted that hydroxide prices were under more downward pressure than carbonate, with the weakness more palpable on hydroxide in China’s domestic market than on carbonate there.
Some Chinese lithium sellers made aggressively low offers to boost sales, adding downward pressure to the entire market, sources told Fastmarkets.
Therefore, the traditional hydroxide premiums over carbonate have disappeared in the East Asia market.
Fastmarkets’ daily price assessment of lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price cif China, Japan & Korea was at $12.50-14.00 per kg on Thursday, unchanged since Monday January 29, but widening downward by $0.70 per kg from $13.20-14.00 per kg a week earlier.
Fastmarkets’ assessment of lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices cif China, Japan & Korea was at $14.00-14.50 per kg on Thursday, unchanged from a week earlier.
Lithium spot price fundamentals remain bearish in Europe and US
Lithium spot prices in Europe and the United States mostly remained rangebound on ongoing bearish fundamentals, sources said.
Market participants continue to report a sluggish market for spot activity and await the end of the LNY celebrations for clarity of a reversal in the bearish trend that has been lingering so far this year, sources said
The traditional premium that the lithium hydroxide prices held over the lithium carbonate prices disappeared in recent sessions in the European and US markets tracking the same dynamic present in Asian spot markets.
Market participants said that the biggest reason behind the recent disappearance of lithium hydroxide premiums in the international market is the more pronounced weakness in hydroxide than carbonate in China’s domestic market.
“With weak lithium hydroxide prices in China, Chinese sellers have an incentive to offer the material internationally dragging down the price,” an intermediary active in both Asia and Europe said.
Fastmarkets’ latest weekly price assessment of lithium carbonate 99.5% Li2CO3 min, battery grade, spot price ddp Europe and US was $14-15 per kg on Thursday, unchanged from a week earlier.
Fastmarkets’ latest price assessment of lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price ddp Europe and US was $13.50-15.00 per kg on Thursday, down by $0.25-0.50 per kg from $14.00-15.25 per kg a week earlier.
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