GLOBAL LITHIUM WRAP: Ongoing contract price negotiations put pressure on seaborne Asian lithium prices; rest of world soft

The cif China, Japan and Korea battery-grade lithium price fell by more than 2% in the week to Thursday November 28, with buyers reluctant to accept any increases because of falling prices in China, where battery-grade lithium hydroxide prices also continued to decline.

  • Seaborne Asian lithium market softens with higher prices unlikely to be accepted by buyers. 
  • Battery grade lithium hydroxide prices hitting fresh lows due to rare buying in China’s domestic market. 
  • Battery grade lithium carbonate prices temporarily stabilized at current level this week in a flat market. 
  • Battery grade lithium carbonate in Europe and US slightly down, but producers unwilling to keep cutting offer prices
Seaborne Asian battery-grade lithium carbonate and hydroxide prices narrowed down this week, with higher prices unlikely to be accepted by most buyers on spot buying. Most buyers have been working on negotiating lower spot and 2020 contract prices following an 11-month decline of China’s prices.
Fastmarkets’ lithium carbonate, 99.5% Li2CO3 min, battery-grade cif China, Japan and Korea spot price fell by 2.6% to $8.50-10.00 per kg on Thursday November 28 from $8.50-10.50 per kg the previous week. 
The lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery-grade cif China, Japan and Korea spot price fell to $10.50-12.00 per kg on Thursday, down 2.2% week on week from $$10.50-12.50 per kg the week before. 
"Any prices above $10 per kg for battery-grade lithium carbonate and $12 per kg for battery-grade hydroxide will be quite hard to sell [because] consumers have been reluctant to accept higher prices since China’s prices [have continued to] decline this year," a distributor told Fastmarkets.
"We are still under negotiation for 2020’s contract prices, and next year’s prices will definitely be lower than current levels [because of] China’s prices falling further," a buyer said.
Poor demand plagues China’s lithium
The Chinese domestic battery grade lithium hydroxide price has been regularly falling to new 2019 lows due to continued poor demand from the high-nickel ternary sector and oversupply in the market.
Fastmarkets assessed the lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery grade, ex-works, spot price at 53,000-58,000 yuan ($7,392-7,819) per tonne on Thursday, down from 54,000-59,000 yuan per tonne previously and 99,000-109,000 yuan per tonne at the start of the year.
"Lower prices for hydroxide keep appearing on the spot market, but the fact is, no matter how low it is, there [is only limited] demand from the battery sector. It will be hard for the market to recover in the short term," a Chinese lithium producer said.
The domestic Chinese battery grade lithium carbonate spot price temporarily stabilized this week after a four-week decline, although downstream demand remained weak because most cathode producers have no immediate needs.
Fastmarkets assessed the lithium carbonate, 99.5% Li2CO3 min, battery grade, exw domestic China, spot price at 52,000-55,000 yuan per tonne on Thursday, unchanged from the previous week.
"The lithium carbonate market has seen no further fluctuation this week because prices were already at quite a low level,” a second Chinese lithium producer source said. “Downstream demand remains weak and sentiment will remain [negative] in the coming month.”
Technical and industrial grade lithium carbonate prices also decreased week on week on reducing demand from buyers. Producers lowered prices to attract deals and most concluded deals were made at 43,000-47,000 yuan per tonne this week.
Europe, US carbonate price narrows down but producers reluctant to cut offers further
Following the downtrend in China, the lithium carbonate 99.5% Li2CO3 min, battery grade, spot price ddp Europe and US, stood at $10-12.5 per kg, down from $10-12.5 per kg in the previous week.
The fall has been caused by lower offers being reported by traders, but any downturn is likely to be constrained since most producers are reluctant to sell material below $10 per kg.
Meanwhile, the lithium hydroxide monohydrate 56.5% LiOH.H2O min, battery grade, spot price ddp Europe and US remained unchanged last week at $12.50-13.50 per kg on Thursday, with limited spot activity.
The market remains in a stalemate, with most buyers already covered and unwilling to accept higher prices and the majority of producers’ reportedly not in a rush to significantly reduce their offers. Market participants expect the situation to unlock a clear price direction during the first quarter of 2020 when consumers will need to restock,
“Buyers are testing the water, they bid lower and they are sending the message that they would only buy at a cheaper price,” a European producer said.
“But we are not willing to cut our offers, since prices are already at critical levels and close to production cuts... further falls would put other producers out of the market as they are making very little margin,” he added.
A second European producer said: “We heard there are some lower offers out that there, but we are not desperate to liquidate material.”

Learn more about Fastmarkets’ lithium pricing methodology here and read the latest lithium price spotlight here
Fastmarkets’ trade log for battery-grade lithium carbonate in China for November includes all trades, bids and offers reported to Fastmarkets.
All lithium carbonate, hydroxide and spodumene prices are available in our Battery Raw Materials Market Tracker. Get a sample of the report here.

Carrie Shi

Carrie.shi@fastmarkets.com

Cristina Belda

cristina.belda@fastmarkets.com

Published

Carrie Shi

Cristina Belda

November 29, 2019

13:30 GMT

London, Beijing