Ganfeng Lithium signs new contracts with LG Chem, Tesla
Ganfeng Lithium has signed a supplementary contract with LG Chem to extend its offtake agreement for a further three years to the end of 2025, it said on Thursday September 20.
This agreement will provide the battery maker with another 45,000 tonnes of battery-grade lithium carbonate and lithium hydroxide. LG Chem initially agreed an offtake deal with Ganfeng Lithium on August 14, with the latter supplying 47,600 tonnes of lithium hydroxide from 2019 to the end of 2022.
The volumes have increased to a total of 92,600 tonnes of lithium carbonate and lithium hydroxide from 2019 to 2025 after the latest supplementary contract with LG Chem.
The two contracts lock purchasing volumes but not prices, with purchasing prices to be adjusted according to market conditions.
Meanwhile, Tesla has also agreed an offtake deal with Ganfeng Lithium, the lithium producer said on Friday.
Ganfeng will provide 20% of its lithium hydroxide production capacity to Tesla between 2018 and the end of 2020 at an adjustable market price, Ganfeng said. The contract can be extended for a further three years upon expiry.
Chinese lithium prices have continued on a downtrend this year and downstream buyers are reluctant to sign contracts at fixed prices in case the value of lithium falls further. This has been reflected in these latest offtake agreements in which only volumes have been locked in, but not prices.
Industrial Minerals assessed the Chinese domestic spot battery-grade lithium carbonate price (min 99.5% Li2CO3) at 78,000-82,000 yuan ($11,393-11,977) per tonne on Thursday, down from 80,000-85,000 yuan per tonne in the previous week.
Battery-grade lithium hydroxide monohydrate (min 56.5% LiOH.H2O) prices were at 110,000-130,000 yuan per tonne on Thursday, unchanged week on week.