Global lithium prices fall further amid persistent EV sector weakness

China’s domestic spot lithium prices have continued their downtrend amid thin demand from the downstream electric vehicle (EV) sector and lack of purchases from lithium consumers, sources told Fastmarkets

The weakness in the Chinese lithium market has bled through into other markets, which has resulted in global declines in lithium prices.

  • Chinese lithium prices decreased on thin demand, bearish sentiment
  • East Asian lithium prices fell amid Chinese market weakness, watchful buyers
  • European and US lithium prices weakened, in line with losses in the Chinese market

Demand for spot lithium salts in China was minimal in the week to Thursday due to a combination of a lack of recovery from the electric vehicle (EV) sector and presently large lithium inventories along the EV supply chain, market participants said.

“There is just no demand right now and the spot market is weak with no signs of improvement in the near term. We are prioritizing using up our lithium carbonate supply from long-term contracts,” a Chinese cathode producer source said.

Most market participants expect the bearish sentiment and weak demand for lithium salts to persist in the coming months. Some even said that lithium prices may remain weak for the first half of 2023, unless the Chinese government implements new policies to boost EV consumption.

“Amid the widespread bearish sentiment, some traders have been trying to get rid of their existing supply of lithium carbonate and have pushed their offers lower and lower, accelerating the downtrend in prices presently seen in China,” a Chinese lithium producer source said, adding that the continual dip in prices has led to even more consumer caution.

Fastmarkets’ weekly price assessment of lithium carbonate 99.5% Li2CO3 min, battery grade, spot price range exw domestic China was 340,000-370,000 yuan ($49,232-53,576) per tonne, on Thursday, down by 30,000-45,000, or 9.55%, yuan per tonne from 385,000-400,000 yuan per tonne.

Lithium hydroxide prices in China also edged lower over the week to Thursday on limited demand, but at a slower pace than those of lithium carbonate.

“Demand for lithium hydroxide is even thinner than that for lithium carbonate. However, major lithium hydroxide producers can export their materials to the East Asian market, where the materials are traded at a premium over the domestic Chinese prices, which lent support to domestic Chinese hydroxide prices,” 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 410,000-440,000 yuan per tonne on Thursday, down by 20,000-30,000 yuan per tonne from 440,000-460,000yuan per tonne.

East Asian market trends lower amid Chinese weakness

Spot lithium carbonate prices in East Asia fell over the week to Thursday, pressed by the ongoing rapid decline in Chinese lithium prices and Chinese sellers eager to destock.

“Many Chinese lithium carbonate sellers are sitting on large inventories. With the demand still thin in China and prices expected to drift even lower, some eager Chinese sellers will try to sell lithium carbonate to the East Asian market as much as they can to destock before any more weakness happens and are willing to sell at prices very close to those on the Chinese domestic market,” a Chinese lithium producer source said.

“We are willing to sell as much battery-grade lithium carbonate as the customers want at $58 per kg. I believe many other lithium sellers are adopting similar tactics,” a Chinese lithium trader said.

However, despite the selling interest, buyers in East Asia remained largely watchful and cautious, due to the expectation of further price drops and have adopted a wait-and-see approach toward spot purchases.

“We have noticed very low liquidity in the seaborne East Asia market because buyers are convinced prices will continue to trend lower and have curtailed their purchasing as a result,” a European lithium seller said.

Battery-grade lithium hydroxide prices in East Asia also declined over the week to Thursday, also due to weakness in the Chinese domestic market, albeit at a slower pace than those for lithium carbonate, sources told Fastmarkets

Major lithium hydroxide producers have been insisting on high lithium hydroxide spot prices because their ongoing long-term agreement prices were still in the upper $70s per kg, according to multiple market participants.

“The lithium hydroxide producers qualified to supply East Asian battery producers are very limited. So even though there are inventories in China whose prices are lower, they cannot be used by those battery producers,” a second Chinese lithium producer source said.

Fastmarkets’ daily assessment of lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices cif China, Japan & Korea was $58-65 per kg on Thursday, down by $2.50-6.50 per kg from $64.50-67.50 per kg a day earlier, and down by $3-7 per kg from $65-68 per kg a week earlier.

The equivalent assessment of lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price cif China, Japan & Korea was $72-75 per kg on Thursday, down by $1 per kg from $73-76 per kg a day earlier, and down by $2 per kg from $74-77 per kg a week earlier.

Europe, US lithium prices continue to fall

Spot lithium prices in Europe and the United States similarly maintained a downtrend due the bearish sentiment from the Chinese domestic market, sources said.

One distributor, who is active mostly in the technical grade space, said that he would reluctantly lower his offer prices to sell his inventory of lithium hydroxide,

The same distributor also said that industrial end consumers were buying on a hand to mouth basis in hopes that prices would continue to go lower and therefore were postponing bigger orders.

Although some stocks of lithium were bought at higher levels earlier this year, those sellers may want to destock now and decrease their offer prices now rather than risk higher losses in the near future if the global downtrend continues, according to an intermediary seller.

Fastmarkets last assessed the price of lithium carbonate 99% Li2CO3 min, technical and industrial grades, spot price ddp Europe and US at $58-63 per kg on Thursday March 2 , down 10.37% from $65-68 per kg a week earlier.

The equivalent lithium carbonate battery grade price ddp Europe was assessed at $58-67 per kg on Thursday March 2, down by 6.72% from $65.50-68.50 per kg a week earlier.

Keep up to date with global market insights and predictions for 2023 and beyond with our lithium data.

Dec 6-7 | Shanghai

Meet the Chinese and international market in the global hub of battery manufacturing. Enjoy expert insights and unique networking opportunities.

What to read next
Spot lithium prices in China further extended losses over the week to Thursday November 30, depressed by continuous weakness in the futures market and tepid spot demand
Some cathode makers have been switching back to lower-nickel cobalt manganese (NCM) from high-nickel NCM cathodes to reduce costs and encourage consumers amid slowing demand for electric vehicles (EVs), Fastmarkets understands
Nearly 18 months since the first nickel-related lawsuit was filed against it in the English High Court, the London Metal Exchange has been cleared on all grounds and the charges against it dismissed.
The UK government’s Department for Business and Trade (DBT) will consider all scenarios before a 10% import tariff on electric vehicles and their battery materials comes into effect on January 1 next year, it told Fastmarkets on Wednesday November 29
Western Australia (WA), Australia’s largest state, will evaluate the possibility of developing cathode active materials (CAM) production once precursor CAM (pCAM) output is up and running, Bill Johnston, the state’s Minister of Mines and Petroleum, told Fastmarkets
Eight key takeaways from our global battery raw material outlook that you should know for 2024 and beyond