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Fastmarkets: Asian lithium prices strengthen on supply concerns

Published by
Global Mining Review,


Concerns over both a short-term tightness in the battery-grade lithium hydroxide spot market and a deficit market in 2022 led to prices for seaborne cargoes in Asia rising in the past week (week commencing 25 October 2021), according to Fastmarkets.

Fastmarkets’ weekly assessment of the lithium hydroxide monohydrate (LiOH.H2O) 56.5% LiOH.H2O min, battery grade, spot price, cif China, Japan & Korea was US$26 – US$28/kg on 28 October, up by US$1/kg from US$25 – US$27/kg in the previous week.

Major suppliers in and out of China have struggled to allocate units outside their long-term commitments to the spot market, while some consumers in the region are finding it increasingly difficult to secure much material as they require when negotiating for next year’s term contracts, sources told Fastmarkets.

Prices for seaborne technical-grade lithium hydroxide in Asia have been at parity with those for battery-grade materials since mid-September, according to Fastmarkets data.

A few Chinese lithium hydroxide producers – major suppliers to South Korea and Japan – have been aggressive with their offers in light of rising prices for spodumene, the feedstock used to produce lithium salts.

At Australian miner Pilbara Minerals’ third auction via its Battery Material Exchange platform on 26 October, bids for spodumene reached a high of US$2350/dry t. This is US$110/dry t higher than that in the second auction in late September.

Spot trades for lithium hydroxide in Asia’s seaborne market were concluded at or close to US$28/kg in the past week, whereas some suppliers in China claimed that they would not consider selling anything unless East Asian buyers could pay the same level as those in China’s domestic market.

Fastmarkets’ assessment of the lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery grade, spot price range, exw domestic China was ¥185 000 – ¥205 000/t (US$28 915 – US$32 040/t) on 28 October, narrowing upward by ¥8000/t from ¥177 000 – ¥205 000/t a week earlier.

Offers from different producers in the spot market remained in a wide range with some of them having fewer available units. This led them to test the market with higher offers.

Some aggressive offers were at or above ¥210 000/t, according to market participants. A consumer source in China noted that such high offers were mostly from producers whose output had been reduced by their using lower grades of spodumene concentrate or because they had less of the feedstock due to a shortage.

Carbonate prices up amid LFP strength

News of electric vehicle (EV) producer Tesla’s higher adoption of lithium iron phosphate (LFP) batteries, costlier feedstock and monthly restocking in China have all contributed to the strength of lithium carbonate prices across the board in Asia.

Fastmarkets’ assessment of the lithium carbonate (Li2CO3) 99.5% Li2CO3 min, battery grade, spot price range, ex-works domestic China was at ¥195 000 – ¥200 000/t on 28 October, up by ¥5000/t on the low end from a week earlier.

Fastmarkets’ assessment of the lithium carbonate 99.5% Li2CO3 min, battery grade, spot price, cif China, Japan & Korea was US$25.50 – US$27.50/kg on the same day, up by US$0.50/kg from US$25 – US$27/kg week commencing 18 October. Sentiment toward lithium carbonate improved after Tesla said it would adopt LFP batteries on all its standard-range models globally.

That said, some market participants have raised concerns over the rapidly rising prices for lithium carbonate, which will eat up the margins of LFP battery manufacturers and force them to slow the pace of their production ramp-up, which in turn might weigh on the market.

On the other hand, lithium carbonate producers raised their offers due to elevated purchasing costs for spodumene, while market participants acknowledged that the pressure on lithium carbonate producers might be higher compared with those on lithium hydroxide producers given that the former need to use more spodumene in the production process.

The first consumer source in China said that to produce one tonne of battery-grade lithium carbonate, approximately 7.8 t of spodumene is needed. This compares with about 7 t for lithium hydroxide.

Stable European, US markets

Spot lithium prices in Europe and the US were unchanged in the past week after the gains of the previous week. But sources expect that price plateau to be short-lived.

They expect the strength from the more liquid Chinese market to filter through in the coming weeks.

Fastmarkets assessed the lithium carbonate 99% Li2CO3 min, technical and industrial grades, spot price ddp Europe and US at US$24 – US$25/kg on 28 October, unchanged week on week. The price was at US$21 – US$22/kg in mid-October.

The lithium carbonate 99.5% Li2CO3 min, battery grade, spot price ddp Europe and US was also flat, at US$25 – US$27/kg. The price was at US$21 – US$22/kg in mid-October.

Sources reported that the supply tightness in Europe and the US was mostly due to soaring prices in Asia, especially in China, with global producers allocating available stock to these more lucrative markets. This means the European and US markets will have to play catch up to secure units.

By Susan Zou, Metal Bulletin Asia, and Dalila Ouerghi, Fastmarkets.

Read the article online at: https://www.globalminingreview.com/special-reports/01112021/fastmarkets-asian-lithium-prices-strengthen-on-supply-concerns/

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This article has been tagged under the following:

Asian mining news Lithium mining news