GLOBAL LITHIUM WRAP: Sustained weak downstream market puts pressure on Chinese prices; US, Europe carbonate falls 4%

China’s domestic spot battery-grade lithium compound prices tumbled week on week on Thursday November 7 after producers cut their offers to stimulate downstream buying, while the European and US carbonate price fell by $0.50 per kg after buyers faced little resistance to lower bids amid a well-supplied market.

  • Chinese producers reduced offer prices for battery-grade lithium carbonate to combat slow demand.
  • Chinese demand for lithium hydroxide remained low, putting downward pressure on domestic Chinese prices.
  • Asian cif China, Japan & Korean prices soft at current level.
  • European and US carbonate price fell on lower bids in an amply supplied market and low spot liquidity

The battery-grade lithium carbonate price recorded a significant decline this week with much lower prices reported on the spot market after producers lowered their offers to boost sales and their cash flow under a quiet market.
Market participants attributed the weak demand for battery grade lithium carbonate to the general bearish supply chain. Downstream buyers from the battery cathode sector said they were in a difficult situation and are reducing output, meaning they require fewer raw materials.

The whole new energy vehicle (NEV) supply chain has held a gloomy outlook since the Chinese government reduced NEVs subsidies for manufacturers. Battery makers have also slowed down their purchasing volumes for cathode materials as a result.

Fastmarkets assessed the lithium carbonate, 99.5% Li2CO3 min, battery grade, exw domestic China, spot price at 54,000-57,000 yuan per tonne on Thursday, down by 3.5% from 56,000-59,000 yuan per tonne the previous week.

China’s lithium carbonate prices have mostly held steady at 56,000-61,000 yuan per tonne from late September to October, narrowing on the high end in late October to 56,000-59,000 yuan per tonne and continuing lower since the start of November.

“Increasingly lower prices for battery-grade lithium carbonate appeared on the spot market this week including for materials produced from brine, mica and spodumene. But some producers still insist on higher prices at above 56,000 yuan per tonne for the moment and are unwilling to lower prices so quickly,” a buyer told Fastmarkets.

“With the approach of year-end some producers, who are eager to boost cash flow, lowered prices to attract more orders. But we haven’t lowered our prices and prices are still above 56,000 yuan per tonne for battery-grade carbonate,” a producer said.

The technical and industrial-grade lithium carbonate prices held stable week on week at 45,000-48,000 yuan per tonne.

Meanwhile, the battery-grade lithium hydroxide market has been struggled due to extremely quiet demand from the downstream sector, translating to lower prices week on week.

Fastmarkets assessed the lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery grade, ex-works, spot price at 55,000-60,000 yuan per tonne on Thursday, down from 58,000-63,000 yuan per tonne in the previous week.

“The current situation is that no matter how low you offer for the hydroxide, there is no demand in China’s domestic market,” a producer said.

Seaborne Asian lithium prices under downward pressure
The seaborne Asian battery-grade lithium spot market remained at last week’s low levels after Thursday’s pricing session.

Fastmarkets assessed lithium carbonate, 99.5% Li2CO3 min, battery-grade price at $9-11 per kg on a cif China, Japan and Korea basis, and the lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery-grade spot price at $11-13 per kg cif China, Japan and Korea, on Thursday, both unchanged from the previous week.

“I haven’t seen lower prices of below $9 per kg for battery-grade carbonate in the Japanese spot market, and only some off-grade materials’ prices are heard at $7.50-8 per kg,” a distributor said.

Although the latest prices were rangebound, market sources said weakness in the Chinese domestic market is likely to put pressure on the Seaborne Asian prices when buyers negotiate deals.

European and US spot prices slightly softer
The European and United States’ battery-grade lithium carbonate spot price fell for the first time since May on Thursday.

Fastmarkets assessed the lithium carbonate 99.5% Li2CO3 min, battery grade, spot price at $10.50-12.50 per kg on Thursday, November 7 down from $11-13 per kg the week before.

The price softened this week after market participants indicated over recent weeks that lower offers were finding little resistance amid quiet spot conditions and sufficient supply.

Yet the lithium hydroxide monohydrate 56.5% LiOH.H2O min, battery grade, spot price ddp Europe and US remained steady at $12.50-13.50 per kg on Thursday after most market participants assessed the market at the midpoint of the range.

During the week, spot activity was limited because most market participants continued to focus on long-term contract talks and were not as active in the spot market.
Some market insiders highlighted that spot purchasing prices could fall once contracts for 2020 are signed at the end of this year citing ample stocks.

“We may see a pick-up on activity by the beginning of next year; the prices I’m hearing are already lower than what we have seen during Q4,” a European trader said.

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 November 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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