Sources have cited downward pressure from ongoing weak demand and the falling futures market, as well as thin liquidity ahead of China’s Mid-Autumn Festival and National Day holidays (September 29-October 6).
- Chinese lithium prices fall on weak demand and drop in futures
- East Asian lithium prices track Chinese downtrend amid slow demand
- Europe, US lithium spot prices decrease; gap with cheaper Asian spot prices narrows
Chinese lithium market remains under pressure
A Chinese lithium producer told Fastmarkets that the spot market was inactive in the past week because of the approaching holiday. “During the holiday, domestic logistics will be halted. Spot deals were very scarce,” they said.
A Chinese lithium trader said: “The market is quiet this week and there hasn’t been much restocking ahead of the holiday. Let’s see how the market will look like following the holiday.”
The fall in the futures market also added pressure to the weakness in spot prices, according to sources.
The most-traded January 2024 lithium carbonate futures contract on the Guangzhou Futures Exchange closed at 150,000 yuan ($20,526) per tonne on Thursday, down by 9,950 yuan per tonne from a closing price of 159,950 yuan per tonne a week earlier.
Market participants attributed the drop in futures prices to the continued weakness in demand for lithium salts from the battery sector, as well as persistently bearish sentiment.
“The gap between the futures prices and the spot prices further adds to the consumer caution,” a second Chinese lithium trader said.
In this scenario, Chinese lithium producer Zhicun Lithium plans to put their facility on care and maintenance between September 29 and October 25 and expects an output loss of 3,000 tonnes of lithium carbonate, the company said in a notice seen by Fastmarkets.
But market participants downplayed the impact of Zhicun Lithium’s production suspension, since consumer demand remained weak in an overall oversupplied market.
Fastmarkets’ assessment of lithium carbonate 99.5% Li2CO3 min, battery grade, spot price range exw domestic China was 160,000-170,000 yuan per tonne on Thursday, down by 5,000 yuan per tonne on both ends from 165,000-175,000 yuan per tonne on September 21.
And the assessment of lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price range exw domestic China was 150,000-170,000 yuan per tonne on Thursday, down by 10,000 yuan per tonne on both ends from 160,000-180,000 yuan per tonne a week earlier.
East Asia prices mirrors Chinese downtrend amid weak demand
Spot lithium prices in East Asia remained on a downtrend in the past week, with sources citing the pressure from weak consumer appetite and the ongoing decrease in China’s lithium prices.
Due to weak demand for hydroxide and large inventories, multiple lithium producers were reportedly offering bigger discounts to their long-term customers to boost lithium hydroxide sales, sources told Fastmarkets.
“Some lithium producers have large inventories of battery-grade lithium hydroxide, and they are very active in making concessions and lowering spot offer prices to strike deals with us,” an East Asian consumer source said.
But an international trader said: “Some Western lithium producers would [go] higher with their lithium hydroxide offers… they don’t want to match the lithium hydroxide prices in China’s domestic market.”
“Even though some sellers may insist on high lithium hydroxide prices at $28-30 per kg, for example, due to high production costs or other reasons, I don’t think buyers can accept those levels, given the big premium those prices have over the equivalent prices in the Chinese domestic market,” a second Chinese lithium producer said.
Fastmarkets’ daily assessment of lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price cif China, Japan & Korea was $23-26 per kg on Thursday, narrowing down by $2 per kg from $23-28 per kg a day earlier, and down by $2-3 per kg from $25-29 per kg a week earlier.
Fastmarkets’ daily assessment of lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices cif China, Japan & Korea was $23-26 per kg on Thursday, widening down by $1 per kg on the bottom end from $24-26 per kg a day earlier.
Europe, US lithium spot prices fall narrowing gap with cheaper Asian spot prices
Lithium spot prices in Europe and the United States continued to decline across the board amid weak spot demand, narrowing the premium they hold over seaborne Asia equivalent prices, sources said.
Fastmarkets last assessed the price of lithium carbonate 99.5% Li2CO3 min, battery grade, spot price ddp Europe and US at $25-27 per kg on Thursday, down by 1.89% week on week.
The assessment of lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price ddp Europe and US was $25-29 per kg on the same day, down 1.82% from the week prior.
“My impression is that buyers in Europe are either well stocked or relying mostly on their long-term agreements. They do not need to enter the spot market at the moment,” a distributor active in Europe and Asia said.
The same source added that despite the weakness in lithium hydroxide prices in Asia, it was still possible to command a marginal premium over lithium carbonate salts in Europe and the US because the price of lithium hydroxide in those regions is traditionally higher.
“It will be very quiet during the Chinese holiday period in Europe… although some international sellers could try to take advantage of the quietness from domestic Chinese sellers to firm up their offers,” an intermediary active internationally said. “But most buyers will remain in a wait-and-see mode, seeking price direction following the Chinese holiday period,” they added.
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