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Fastmarkets: Asian lithium market steady; European, US prices boosted by tight supply

Published by , Editor
Global Mining Review,

Battery-grade lithium carbonate and hydroxide prices in China were stable this past week, with consumers continuing to purchase on an as-needed basis ahead of the next round of month-end restocking.

Fastmarkets’ assessment of the lithium carbonate 99.5% Li2CO3 min, battery grade, spot price range, ex-works domestic China was at ¥195 000 – ¥200 000/t (US$30 546 – US$31 330/t) on 18 November 2021, unchanged since 28 October 2021.

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 on 18 November, also unchanged since 28 October 2021.

Multiple market participants in China noted tight availability of battery-grade lithium carbonate, while lithium hydroxide of the equivalent grade was easier to secure in the spot market due to a better outlook in China for lithium iron phosphate (LFP) batteries, which on feed battery-grade lithium carbonate.

“There is room for the battery-grade lithium carbonate price to edge higher. The strength from the EV [electric vehicle] boom is strong, and LFP batteries will continue to outperform nickel-cobalt-manganese (NCM) batteries in China, which will underpin the battery-grade lithium carbonate price in China,” a Chinese trader said.

“Amid the positivity toward LFP batteries and the expectation for battery-grade lithium carbonate [prices] to move even higher, suppliers are holding their units in tight hands, which tightens the availability of battery-grade lithium carbonate in the spot market,” a Chinese consumer said.

Meanwhile, the price for battery-grade lithium hydroxide, which is the feedstock of NCM batteries, is expected to remain stable in the near future, due to the less optimistic outlook for NCM batteries in China and the easy availability of spot units, multiple market participants told Fastmarkets.

“In addition to the outlook of NCM batteries, production capacity of battery-grade lithium hydroxide has been extended to a high level, so these units are easy to secure on the spot market, which should keep the price [for battery-grade lithium hydroxide] in China stable,” a second Chinese consumer source said.

Elsewhere, in the seaborne East Asian market, lithium prices were stable amid thin trading activity and tight availability of spot units.

Fastmarkets’ assessment of the lithium carbonate 99.5% Li2CO3 min, battery grade, spot price, cif China, Japan & Korea was US$27.50 – US$29/kg on 18 November 2021, unchanged from a week earlier.

Fastmarkets’ weekly assessment of the lithium hydroxide monohydrate 56.5% LiOH.H2O min, battery grade, spot price, cif China, Japan & Korea was US$28 – US$30/kg on 18 November 2021, also unchanged week on week.

With the holiday season approaching, logistics out of South America, which play an important role in global lithium production, will be interrupted, further tightening the availability of lithium salts in seaborne East Asian market and the global markets, market sources told Fastmarkets.

“Logistics [out of South America] will be a big problem in December and January during the holiday season, which will disrupt the shipments [of lithium salts] further,” an Asia-based trader said.

Technical-grade and battery-grade lithium spot prices strengthened across the board in Europe and the US over the past week on ongoing tightness in the spot market and surging prices for technical-grade compounds, sources said.

“The gap between China and other global markets is closing and I think the market remains really short for the time being…there is no sign of price stability so far. As long as demand remains strong the price pressure will be there and I expect that in the first part of next year we should not see major changes regarding the current situation, while in the second half we will see what happens with more supply being available,” a source from a major brine-based producer of lithium salts said.

“In the current situation you can achieve very good price with technical grade compounds due to their tightness so the gap with the battery-grade compounds is narrowing,” he added.

A distributor of technical-grade compounds active in Europe agreed with the tightness in the spot market for technical-grade, saying they will receive lower volumes of lithium salts for the long-term contract they are negotiating for next year due to the shortness in the market.

The distributor added that he is receiving more spot inquiries from new customers that are struggling to find spot units in the market regardless of the price.

Published by: Dalila Ouerghi and Zihao Li, Fastmarkets.

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