GLOBAL LITHIUM WRAP: China carbonate price narrows on buyer resistance

The Chinese domestic spot battery-grade lithium carbonate price fell by 1.1% on Thursday April 2 due to reluctance on the buy side to accept higher prices.

  • China’s battery-grade lithium carbonate price fell on the high end of the range after buyers declined offers at higher levels.
  • China’s lithium hydroxide price stabilized after the previous week’s decline.
  • Asian seaborne spot market remains slack.
  • European and US lithium battery-grade prices held steady in a continued slow market.

Most prices gathered for China’s spot domestic battery-grade lithium carbonate market in the week to April 2 were at the lower end of the Fastmarkets range, reflecting continuous weak demand from the downstream cathode sector. Buyers were reluctant to accept higher prices and offers in that region gradually disappeared from the spot market.

As a result, Fastmarkets’ weekly price assessment for lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price range exw domestic China moved down on the high end of the range to 43,000-48,000 yuan ($6,060-6,764) per tonne from 43,000-49,000 yuan per tonne in the previous week.

“Prices are mostly in the range of 43,000-48,000 yuan per tonne, and we also heard some lower offering prices of 42,000 yuan per tonne for materials produced from brine or mica,” a producer in China told Fastmarkets.

“But no matter how low the offering prices are, there are limited deals due to quiet demand from downstream cathode makers,” the producer added.

“There has not been great improvement in orders from downstream buyers and some buyers still have a negative short-term attitude toward lithium prices even though prices have already hit the bottom,” a second China-based producer said.

“I think prices have limited room to move down, but we have to be cautious if downstream demand continues to be weak,” the second producer source added.

Following last week’s 3.7% drop, the lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery grade, spot price range exw domestic China price stabilized this week at 50,000-55,000 yuan per tonne.

There was limited trading due to absent domestic downstream demand, according to market sources.

“The battery-grade lithium hydroxide market is relevantly stable in the current range this week and I haven’t heard of further fluctuation,” a buyer said.

Asian seaborne market flat with bearish bias
The cif China, Japan and Korea battery-grade lithium spot market remained quiet this week with few spot transactions.

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, both unchanged week on week.

Some market participants reported lower offering prices appearing in the spot market, suggesting softening for seaborne prices in response to the weak demand.

“The seaborne spot market is likely to going down as some lower offering prices have been heard. But currently demand itself is not so high and the sales pace remains slow,” a distributor said.

“Because of the Covid-19 virus, our customers are not so focused on the price because the supply chain is more important. However, most distributors – including us – have a lot of inventory so there will be no shortage [if the supply chain is disrupted],” a second distributor to the Asian seaborne market said. “The fear of supply shortage might prevent significant price falls but once the virus has passed, prices level might drop lower.”

Slow, steady European, US lithium markets
Lithium carbonate and hydroxide battery-grade spot prices in Europe and the United States were unchanged in the seven days to April 2 because the market remains in a “wait-and-see” mode while the coronavirus pandemic and its global spread continues to disrupt supply chains and weaken demand.

Fastmarkets assessed the lithium carbonate 99.5% Li2CO3 min, battery grade, spot price ddp Europe and US at $9.50-10.50 per kg. The assessment has remained unchanged over the past five weeks after dropping at the end of February when the deadly virus started its global spread.

The lithium hydroxide monohydrate 56.5% LiOH.H2O min, battery grade, spot price ddp Europe and US was equally unchanged at 10.50-11.50 per kg, a level it fell to on March 5.

“It is a very fluid situation,” a buyer of raw lithium products with operations in western and Asian countries said. “We are hearing that demand will suffer in the second quarter of this year and could start to recover in the third or fourth quarter.”

The same source added: “ We have not yet experienced direct disruptions but we are not very active on the spot market.”

Elsewhere, producers of lithium chemicals in Europe spoke of logistic disruptions and a slowdown of spot market activity.

“We are focusing on our long-term contracts while the spot market remains quiet,” a producer based in Europe said. He added:” higher charter rates for containers are one of they key issues in logistic at the moment.”

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 April 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.