Lithium spodumene prices down 2.8% in June vs May

Lithium spodumene prices have declined by 2.8% in Asia over the past month, reflecting a slowdown in demand and low lithium carbonate and hydroxide prices in China.

Fastmarkets' monthly assessment of the contract price for spodumene (minimum 5-6% Li2O) was at $585-650 per tonne cif China on Wednesday June 26, down from $600-670 per tonne on May 29.

Last week, Pilbara Minerals said that it would restrict its lithium production in June and July due to reduced demand in the second quarter of 2019 caused by delays in the commissioning of chemical conversion capacity by the company's key offtake partners in China.

Lower demand for lithium chemicals than previously expected is also weighing on spodumene prices, market participants told Fastmarkets.

“There is currently a bottleneck on cell-battery manufacturing in China and Japan causing lower levels of production expected throughout 2019,” a lithium spodumene producer told Fastmarkets. “We did not expect this but it is squeezing the supply chain from top to bottom therefore pushing lithium spodumene prices down.”

Low lithium carbonate and hydroxide prices in China have also helped push lithium spodumene prices down gradually over the course of the past year. In recent years, lithium spodumene has become an important source of feedstock to produce lithium chemicals in China.

Fastmarkets' assessment of the spot price for battery-grade lithium carbonate (minimum 99.5% ex-works China) stood at 70,000-77,000 yuan ($10,175- 11,193) per tonne on June 20, unchanged from the prior week but down by 56.8% from 165,000-175,000 yuan per tonne on December 21, 2017.

The battery-grade lithium hydroxide monohydrate (minimum 56.5% LiOH.H2O) spot price was assessed at 80,000-85,000 yuan per tonne on June 20, down by 44% from an assessed price of 145,000-150,000 yuan per tonne on December 21, 2017.

“Lower lithium prices in China have been influencing our lithium spodumene prices over the course of the past year, causing at some point in time last year to see some lithium converters in China to default on their lithium spodumene contracts,” a lithium spodumene producer told Fastmarkets.

The current sluggish market is also causing some lithium spodumene miners to sell their material at lower prices to boost their cash flow. Although, this is said to be a temporary measure due to the low lithium prices in China at present.

At the same time, lithium spodumene miners in Australia are also said to be working at improving efficiencies while ramping up their projects. This is set to make some of these projects more resilient to the periods of low lithium prices in the coming years.

Martim Facada

martim.facada@fastmarkets.com

Published

Martim Facada

June 27, 2019

06:08 GMT

London