SQM signs lithium supply agreement with LG Energy Solutions

Chilean lithium producer Sociedad Quimica y Minera (SQM) has signed a long-term supply agreement for high quality lithium cathode material with LG Energy Solutions, it said on Tuesday December 22.

Under this agreement, SQM will supply battery-grade lithium carbonate and lithium hydroxide to South Korean battery maker LG Energy Solutions for cathode manufacturing from 2021 to 2029 with a total volume of around 55,000 tonnes of lithium carbonate equivalent (LCE).

SQM said the signing of this large-scale long-term supply agreement is an important milestone for the company not only because it is part of its growth strategy to increase market share in the lithium sector, but also because it solidifies its prominent position as a high-quality lithium supplier for the production of batteries of electric vehicles (EVs).

The companies did not disclose prices for the lithium compounds or other details this time.

LG Energy Solution is the wholly-owned subsidiary of LG Chem, a South Korean battery maker for EVs, that was set up on December 1, 2020, to develop the group’s battery-related business.

“This seems a constructive development as it enables LG Energy Solutions to secure supply from a low-cost producer while at the same time it provides SQM with a secured buyer that will help SQM plan and invest in future capacity. We expect to see more deals like this as the downstream part of the supply chain will likely want to secure supply given the billions they are investing in EV production capacity,” head of base metals and battery research at Fastmarkets William Adams said.

The cif China, Japan and Korea battery-grade lithium market has been stable for several months since it moved down to its current levels in mid-September.

Fastmarkets assessed the lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price cif China, Japan and Korea at $6-7.50 per kg on Thursday December 17. The price fell from $6.50-8 per kg on September 17.

The lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery grade, spot price, cif China, Japan and Korea has maintained $8.50-9.50 per kg since September 17, when it fell from $8.80-10 per kg.

But some market participants have increased their offer prices for lithium carbonate, supported by rising China’s prices on the back of supply restraints and a pick-up in downstream demand.

What to read next
The price of graphite flake fines in China continued to edge lower amid slow demand and a depreciation of the local currency in the week ended Thursday May 25. Spherical graphite prices in the country, meanwhile, held at the 11-year low reached in the previous session
The outlook for North American steel scrap prices has headed further into bearish territory ahead of June’s trade, with prices for all grades expected to fall again after a round of across-the-board decreases in May
Fastmarkets is inviting feedback on a change of publishing time for our ferro-chrome price in the Chinese domestic market as well as ferro-chrome import prices in Japan and South Korea, to 5-6pm Shanghai time from 2-3pm London time.
Fastmarkets is inviting feedback on a proposal change the publishing time for our silico-manganese, ferro-manganese and manganese ore port prices in China, to 5-6pm Shanghai time from 2-3pm London time.
Chinese lithium prices continued to trend upward over the past week, but at a slower pace than in previous weeks due to the emergence of bearish sentiment and resistance among consumers
The publication of Fastmarkets copper concentrates TC index, cif Asia Pacific was delayed on Friday March 26, due to a reporter error.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.