GLOBAL LITHIUM WRAP: Chinese prices surge on optimism for spodumene, LFP battery demand

Lithium prices in China rallied further in the week to Thursday August 19, with optimism over demand for lithium iron phosphate (LFP) batteries continuing to boost sentiment.

  • Domestic prices for battery-grade lithium in China rose on strong momentum in technical-grade carbonate market and tight supply in spot market.
  • Seaborne prices for battery-grade lithium hydroxide strengthened on emergence of more inquiries after week-long summer holiday in Japan.
  • Battery-grade lithium prices in Europe and the United States rose on tight availability despite summer lull.

Battery-grade lithium carbonate prices in China rose rapidly despite thin trades during the week, with producers who had been keeping a close eye on the rally for technical-grade material either making aggressive offers or refraining from issuing them in anticipation of higher prices.

Some consumers acknowledged that sellers had the upper hand amid the current tightness in the market.

Fastmarkets’ assessment of the lithium carbonate 99.5% Li2CO3 min, battery grade, spot price range, ex-works domestic China was at 105,000-110,000 yuan ($16,165-16,935) per tonne on Thursday, up by 10,000 yuan (10.3%) per tonne from 95,000-100,000 yuan per tonne a week earlier.

Fastmarkets’ assessment of the lithium carbonate 99% Li2CO3 min, technical and industrial grade, spot price range exw domestic China was 100,000-105,000 yuan per tonne on Thursday, up by 7,000-10,000 yuan per tonne from 93,000-95,000 yuan per tonne a week earlier.

“It feels like the supply of lithium carbonate is even tighter than that for lithium hydroxide,” a consumer source said. “Such tightness is driven by the strong demand from producers of LFP batteries.”

“It is not difficult and doesn’t take a long time to build up an LFP battery operation line, which results in a quick ramp-up of LFP battery production capacity, which in turn boosts demand for technical-grade lithium carbonate,” he added.

In addition to the sustained support from LFP batteries, some market participants have pointed out that lithium producers in China who feed on brine thought the spodumene rally was the common driver for the entire lithium complex. As such, these producers are looking to raise prices for lithium salts produced from brine.

Spodumene and brine are two major feedstock for producing lithium salts.

Fastmarkets’ monthly price assessment for spodumene 6% Li2O min, cif China was at $880-950 per tonne on July 28, up by $190-200 per tonne (27.1%) from $690-750 per tonne on June 30 and more than double compared with October 2020 when prices bottomed out at $360-390 per tonne.

In addition, Australian miner Pilbara Mineral’s inaugural spodumene concentrate auction on July 29 generated bids as high as $1,250 per dry metric tonnes.

Market participants broadly anticipate the spot spodumene price to edge higher. This will in turn boost prices for Chinese battery-grade lithium hydroxide that are produced mostly from spodumene.

Fastmarkets’ assessment of the lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery grade, spot price range, exw domestic China rose to 120,000-123,000 yuan per tonne on Thursday, up by 3,000-10,000 yuan per tonne from 110,000-120,000 yuan per tonne a week earlier.

Lithium hydroxide prices rise
Battery-grade lithium hydroxide prices in Asia’s seaborne market started to track the movements of Chinese prices after some Japanese consumers returned from a week-long summer break. Several supplier sources said they had received more urgent inquiries.

Fastmarkets’ weekly assessment of the lithium hydroxide monohydrate 56.5% LiOH.H2O min, battery grade, spot price, cif China, Japan & Korea was $15.50-17.00 per kg on Thursday, up by $0.50 per kg from $15.00-16.50 per kg previously.

“We’ve got quite a few inquiries, with some even willing to buy units that are slightly outside standard specifications,” a distributor source said. Buyers are prioritizing supply security above anything else, the source said.

Fastmarkets’ assessment of the lithium carbonate 99.5% Li2CO3 min, battery grade, spot price, cif China, Japan & Korea was at $14-15 per kg on Thursday, unchanged for a third week.

Tight supply underpinning European, US markets
Lithium spot markets in Europe and the US strengthened in the past week amid persistently tight supply despite thin trading due to a summer lull.

Fastmarkets’ weekly price assessment for the lithium carbonate 99.5% Li2CO3 min, battery grade, spot price, ddp Europe and US was $15.00-16.00 per kg on Thursday, up by $0.50 per kg from $14.50-15.50 per kg a week earlier. Prior to Thursday, prices had been flat since July 8.

The weekly assessment of the lithium hydroxide monohydrate 56.5% LiOH.H2O min, battery grade, spot price, ddp Europe and US also rose by $0.50 per tonne on the week to $16.50-17.50 per kg on Thursday. This price had also been flat since July 15 previously.

Sources told Fastmarkets that the strength in the Chinese lithium market and global spodumene market would extend into Europe, albeit with a bit of a delay due to low consumption rates for the battery raw material during the summer.

A producer source noted that the summer lull along with the fact that liquidity in general was thinner in Europe and the US compared with the rest of the world, coupled with these regions’ smaller customer base meant that a strengthening of European and US prices would not be apparent on a weekly basis. He expects to see a big jump of prices in those two markets in September.

Dalila Ouerghi in London contributed to this report.

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

Fastmarkets’ trade log for battery-grade lithium hydroxide, spot price cif China, Japan & Korea, 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.

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