Core Lithium announces second spodumene shipment as consumers look to diversify sources
Australian lithium miner Core Lithium will export its second shipment of spodumene concentrate to offtake partner Sichuan Yahua on Wednesday this week, it announced on Tuesday July 11
Chinese companies across the lithium value chain, meanwhile, continue to ramp up their production from spodumene projects in Africa in their attempts to diversify the sources of spodumene supplies, which are currently dominated by producers in Western Australia.
The Core Lithium shipment will contain about 13,100 tonnes of concentrate and will represent the balance of an initial 18,500 tonnes of first production sold to Sichuan Yahua as part of the companies’ commercial agreement.
The concentrates were produced at Core’s Finniss lithium project in Australia’s Northern Territory, and were part of a long-term agreement with Yahua for 300,000 tonnes of concentrates over four years.
Core Lithium is a relatively new participant in the spodumene market, and made its first shipment of spodumene in March this year.
The company said that prices have been settled for the cargoes, with payments at various stages. Both the initial shipment and the latest shipment were sold on an FOB basis and were linked to Fastmarkets’ spot price assessment for spodumene 6% CIF China. The actual price was not specified, with the company saying that the “balance of the purchase price for the current cargo will be settled soon after shipment.”
Spodumene spot prices have been under pressure in recent weeks amid improved supply, as well as weaker lithium hydroxide prices in both the domestic China and seaborne markets.
Fastmarkets’ latest fortnightly assessment of the spodumene min 6% Li2O, spot price, cif China, was $3,400-3,700 per tonne on July 6, down from $3,500-4,000 per tonne on June 22.
The corresponding assessment of the monthly spodumene min 6% Li2O, contract price, cif China, was $3,000-3,600 per tonne on June 28, down from $3,600-4,010 per tonne on May 31.
Spodumene prices were now less than half what they were at the beginning of the year. The spot price was $7,900-8,200 per tonne on January 5.
Market participants told Fastmarkets that they expected this downward pressure on prices to continue. One trader added that, with more and more material coming on stream, they expected lithium metal prices to fall.
Although prices have come under pressure in recent weeks, some participants in the market in China still believed that they were high compared with market fundamentals, and that this emphasized the need to diversify supply sources beyond Western Australia.
At present, most of the spodumene mined in Western Australia is shipped to China, where most of the refining capacity is located. Spodumene is then transformed into lithium chemical salts.
At Fastmarkets’ conference on Lithium Supply and Battery Raw Materials, held in Las Vegas in the US, June 20-22, a number of market participants active in the Chinese domestic market noted the high price of spodumene concentrate from Western Australia, and their increasing interest in diversifying the sources of supply.
But they admitted to having concerns about the purity of spodumene mined elsewhere, and about establishing reliable business relationships and overcoming logistical challenges.
Despite these concerns, however, Chinese lithium producers were beginning to commission spodumene projects in Zimbabwe, in southeast Africa.
On July 5, Chinese producer Hauyou Cobalt announced that it was commissioning its Arcadia lithium project in Zimbabwe. Fellow Chinese producer Chengxin Lithium started commissioning its Sabi Star project in the same region in May.
These two projects will produce a combined total of 75,000 tonnes per year of lithium carbonate equivalent (LCE). They are part of a series of investments in lithium production in Zimbabwe.
Concerns over longer-term supplies of lithium salts persist, however, with industry experts at Fastmarkets’ Las Vegas conference emphasizing the importance of further investment to drive upstream production.
These concerns were informed by forecasts of deficits, despite increased spodumene production and continued investment in new supply, with near-term forecasts for the lithium market continuing to indicate supply tightness.
Fastmarkets’ research team currently forecasts that the global lithium market will be in a deficit of 82,690 tonnes LCE in 2024, compared with a forecast deficit of 72,400 tonnes LCE in 2023.