Global lithium prices extend losses amid ongoing weak demand
China’s lithium prices continued to soften in the week to Thursday November 16, remaining under downward pressure from persistently weak buying appetite and bearish sentiment
Lithium prices in other markets followed the same trajectory, tracking the Chinese market and facing weak regional demand.
China reports limited lithium spot transactions
Market participants in China’s domestic market continued to observe limited spot transactions of lithium salts. Consumers relied largely on long-term supplies, especially with battery makers sitting on large inventories of batteries, which prompted low demand for any upstream raw materials.
“Demand for lithium carbonate remains very weak. While the market dynamics remains as weak as in the previous weeks, lithium prices continue to fall slightly every day,” a Chinese cathode producer source said.
Most lithium carbonate consumers minimized spot purchases to avoid holding excess inventory in the run-up to year-end, Fastmarkets heard.
In the meantime, market sentiment remained bearish, with market participants widely saying there was little hope that lithium demand could rebound in the short term. They said that the current lithium price downtrend and weak demand could persist at least into the first quarter of 2024.
Fastmarkets’ weekly price assessment of lithium carbonate 99.5% Li2CO3 min, battery grade, spot price range exw domestic China was 141,000-150,000 yuan per tonne on Thursday, down by 5,000-8,000 yuan per tonne from 149,000-155,000 yuan per tonne a week earlier.
Some market participants reported that the battery-grade lithium hydroxide prices could be as low as 130,000 yuan per tonne, a level lower than the production costs, especially if the material is produced from spodumene, they said.
“It’s no longer a matter of production costs of lithium hydroxide, but the demand. With no demand, there’s no bottom to the current price downtrend,” a Chinese lithium trader said.
Fastmarkets’ weekly price assessment of lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price range exw domestic China was 130,000-145,000 yuan per tonne on Thursday down by 5,000-10,000 yuan per tonne from 140,000-150,000 yuan per tonne a week earlier.
Fastmarkets’ fortnightly price assessment of spodumene min 6% Li2O, spot price, cif China was $1,500-1,800 per tonne on November 9, down by $200-300 per tonne from $1,800-2,000 per tonne two weeks earlier.
East Asia lithium prices track weakness in quiet spot market
Lithium prices in the East Asia market also trended downward in the past week, with market participants reporting limited spot demand and scarce spot transactions, while the ongoing weakness in China’s domestic market filtered into the region.
“The spot lithium market in East Asia is extremely quiet. Some consumers are even negotiating with their suppliers for less volume of lithium hydroxide from their long-term deliveries,” a Chinese lithium producer source said.
“A good amount of consumers’ demand was outnumbered by their long-term hydroxide supplies this year,” they added.
“Some lithium producers have large stocks of lithium hydroxide and are trying to offload material with competitive prices amid current weak demand, which adds further pressure on hydroxide prices,” an East Asian consumer source said.
The carbonate market was even less active than the hydroxide market, which is typically quieter, with market participants saying inquiries for lithium carbonate were rarer than usual.
Fastmarkets’ daily price assessment of the lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price cif China, Japan & Korea was $20.00-21.50 per kg on Thursday, narrowing down by $1.00 per kg from $20.00-22.50 per kg a day earlier, and also narrowing down by $1.50 per kg from $20.00-23.00 per kg a week earlier.
Fastmarkets’ daily assessment of the lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices cif China, Japan & Korea was $20-21 per kg on Thursday, unchanged from a day earlier, but down by $1 per kg from $21-22 per kg a week earlier.
Europe, US lithium spot prices follow Asian bearishness
Lithium spot prices in Europe and the United States continued to trend lower across the board affected by weakness from the more liquid Asian markets, sources said.
A market participant active in both Europe and Asia said that he started to see very competitive offers for lithium hydroxide from Chinese sellers in the international market.
A distributor active in Europe said that buyers were bidding lower because they were aware of the international bearish dynamics impacting the lithium market.
“We also saw a year-on-year decline in demand from the construction sector. Due to the price volatility of lithium, they tried to replace it with cheaper alternatives,” the same distributor of lithium technical grade compounds said.
An intermediary said that the traditional premium that the European and US markets hold over the seaborne Asia market is shrinking due to competitive offers and near-term bearish outlook, with freight rates only accounting for a marginal difference in prices.
Fastmarkets last assessed the price of lithium carbonate 99.5% Li2CO3 min, battery grade, spot price ddp Europe and US at $20.00-22.50 per kg on Thursday, down by 4.49% week on week.
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