GLOBAL LITHIUM WRAP: Asian market activity curtailed by delayed return to work; European market still covered

China’s domestic spot lithium market remained quiet this week due to most market participants staying off work on government advice to suspend business operations during the novel coronavirus in China, while the European market was not yet disrupted due to sufficient inventories.

  • Asian battery grade lithium prices were unchanged week on week Most market participants in China have delayed their return to work due to the coronavirus outbreak. 
  • China’s internal transportation network has been disrupted, affecting cargo delivery. 
  • European and US market not yet significantly disrupted because they are heavily reliant on South America.

There was limited spot trading in China in the week to Thursday February 6 because most market participants had not returned to work due to the coronavirus outbreak which has infected over 30,000 people as of the end of this week.

Fastmarkets’ weekly price assessment for lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price range exw domestic China was 45,000-51,000 yuan ($6,431-7,289) per tonne on Thursday, unchanged from the previous week.

The lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery grade, spot price range exw domestic China was also steady at 52,000-57,000 yuan per tonne on Thursday.

“We haven’t resumed production this week and estimate to be back after February 9. We haven’t adjusted our prices for the moment, but supply might be a little tight once we resume production as most buyers didn’t stock up sufficiently ahead of the Lunar New Year holiday [starting on January 24],” a producer told Fastmarkets.

“Our company hasn’t returned to work, and we made no new purchases this week. I am still holding a watchful attitude for next week’s market,” a cathode producer said.

This week’s industrial-grade lithium carbonate market remained quiet with limited spot trading. Some lower offer prices were heard but few deals were concluded. Fastmarkets assessed the Chinese technical and industrial grade lithium carbonate spot price as unchanged week on week at 38,000-41,000 yuan per tonne on Thursday.

Meanwhile, travel restrictions introduced to contain the spread of the virus is having an effect on logistics businesses, sources said. Delivery fees have increased but even those willing to pay are struggling to find available freight carriers.

“Currently logistics are also delayed due to the coronavirus. Freight fees for hydroxide even doubled, but it is still hard to find freight cars to deliver materials. We will see whether the situation will be better next week,” a second producer said.

Asian lithium seaborne market flat
The cif China, Japan and Korea battery-grade lithium compound prices also held at current levels this week.

Fastmarkets assessed the lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price at $8-9.50 per kg, and lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery grade, spot price at $9.50-11 per kg, both on a cif China, Japan and Korea basis.

Seaborne Asian logistics have also been affected due to the coronavirus, with reports that there are limited customs officials to clear shipments at ports.

“So far as I know, some customers who depend on China’s suppliers have trouble receiving raw materials and they might suffer a lack of stock,” a distributor said.

“Lithium production in China has been delayed and logistics has also slowed due to the coronavirus. As of now, we still have some stocks, but I am a little worried about the future around spring,” a distributor told Fastmarkets.

European market unchanged with enough inventories available
In Europe and the United States, lithium market participants reported no effect on supply as a result of the coronavirus so far. But if logistic restrictions are prolonged, European original equipment manufacturers (OEMs) that rely on lithium battery cells from Asia will suffer supply chain disruptions, Fastmarkets head of battery raw materials research William Adams said.

For the time being European producers have not reported any significant distress.

“We have enough inventories; we are covered for the next few months,” a European producer said.

Other participants pointed out that they rely on South America, with Chile being the main supplier of lithium for them, and China is not a key factor supplier of raw materials.

Unrelated to the virus, some smaller producers in Europe are offering to liquidate stocks, as Fastmarkets reported last week. But the offers have not yet affected prices because as there is a lack of clarity about the quality of the material on offer and no consumer has reported purchasing at these levels.

“There are rumors of lower prices out there, but nothing has been concluded and that is not representative of where the market stands,” the European producer said.

Fastmarkets’ lithium carbonate 99.5% Li2CO3 min, battery grade, spot price ddp Europe and US was unchanged amid a quiet trading environment at $10-11.50 per kg on Thursday.

The lithium hydroxide monohydrate 56.5% LiOH.H2O min, battery grade, spot price ddp Europe and US also remained flat on last week at $11.50-12.50 per kg on Thursday.

Learn more about Fastmarkets’ lithium pricing methodology here and read the latest lithium price spotlight here.

Fastmarkets’ trade log for battery-grade lithium carbonate in China for February includes all trades, bids and offers reported to Fastmarkets.

All lithium carbonate, hydroxide and spodumene prices are available in our Battery Raw Materials Market Tracker. Get a sample of the report here.