GLOBAL LITHIUM WRAP: Slow consumption causes global prices to tumble

Battery-grade lithium compound prices fell in almost all markets in the week to Thursday July 2, reflecting a continued weak demand environment in Asia, Europe and the United States.

  • Sufficient stocks combined with weak demand to pressure China’s battery-grade lithium carbonate prices down by 2.5%.
  • Asian battery-grade lithium prices narrowed downward after buyers refused to accept higher prices.
  • Europe, US prices weakened, with no support from soaring Covid-19 cases in key supplier country, Chile.

Market participants continued to report lower prices for domestic Chinese battery-grade lithium carbonate, pulling the assessment down 2.5% week on week on Thursday.
Fastmarkets’ weekly price assessment for lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price range exw domestic China was 38,000-41,000 yuan ($5,375-5,799) per tonne, down from 39,000-42,000 yuan per tonne from previous week.
Although some downstream buyers placed orders in the first half of the assessment period in late June, overall demand remained slow.
“Lower prices keep being seen for battery-grade lithium carbonate this week. Material produced from spodumene are at around 39,000 yuan per tonne, while some non-spodumene carbonate were even below 38,000 yuan per tonne,” a producer told Fastmarkets.
A buyer corroborated the price indications: “We are unwilling to accept prices higher than 39,000 yuan per tonne for battery-grade lithium carbonate when purchasing, and material produced from brine or mica are even lower.”
For lithium hydroxide in China, a second buyer said some sellers eager to conclude deals were lowering their offers. But the assessment was unchanged week on week due to a lack of deals.
Fastmarkets’ lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery grade, spot price range exw domestic China was at 46,000-52,000 yuan per tonne on Thursday.
“China’s domestic demand for battery-grade lithium hydroxide remained slow, and most prices held unchanged this week,” the second buyer added.
Asian seaborne lithium market softens
The cif China, Japan and Korea battery-grade lithium spot market narrowed down this week.
Fastmarkets assessed the lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price at $6.50-8 per kg on a cif China, Japan and Korea basis, down by 50 cents on the high end of the range from a week ago.
The battery-grade lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery grade, spot price cif China, Japan and Korea also fell on the high end of the range to $9-10 per kg from $9-10.50 per kg in the previous week.
Market participants attributed the price movement to buyers refusing to accept higher prices, while spot demand remained limited.
“Seaborne prices become soft as it is hard to make deals at higher prices. I think the situation will stay in the similar range of $6.50-8 per kg [for carbonate] for a while or even lower,” a distributor said.
Europe, US lithium demand remain slack
European and US lithium technical and battery-grade prices came under further pressure in the seven days to July 2 from slack downstream demand.
Fastmarkets' lithium carbonate 99.5% Li2CO3 min, battery grade, spot price ddp Europe and US fell to $8-9.50 per kg on Thursday after the holding steady at $8.50-9.50 per kg over four consecutive weeks.
Meanwhile, the price for lithium carbonate 99% Li2CO3 min, technical and industrial grades, spot price ddp Europe and US remained unchanged for five weeks in a row at $6-8 per kg on Thursday.
A source active in the upstream sector in Europe said: “The third quarter is usually a slow quarter in Europe with several plants closed in August for maintenance. The bottom end of the range [of the lithium carbonate technical grade Europe, US spot price] could come under further pressure.”
A second source active in the upstream supply chain echoed the same view, adding: “Still no sign of recovery short term.”
The lithium hydroxide monohydrate 56.5% LiOH.H2O min, battery grade, spot price ddp Europe and US fell by 4.6% week on week to $9.75-11 per kg on Thursday, ending a four-week steady streak.
Chile supply unaffected by Covid-19 cases
And while demand continues to be weak in Europe and the US, there is little respite on supply. The market does not expect significant support from the spike in Covid-19 infections in Chile, a key producer of lithium compounds, as lithium extraction and export operations in Chile have not been affected so far, producers told Fastmarkets this week.
Key lithium producers in Chile, Sociedad Química y Minera de Chile (SQM) and US Albemarle, told Fastmarkets that they are taking preventative measures at their operational plants and there has not been any disruption on lithium productions and supply chain in Chile so far.

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 July 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

Dalila Ouerghi

dalila.ouerghi@fastmarkets.com

Published

Carrie Shi

Dalila Ouerghi

July 03, 2020

12:34 GMT

London, Beijing