PRICING NOTICE: Proposal to increase the pricing frequency for spodumene assessment

Fastmarkets proposes to increase the pricing frequency for its spodumene assessment to fortnightly.

The assessment for spodumene 6% Li2O min, cif China is currently published on the last Wednesday of each month.
Following an initial consultation with the market, and a review of typical data sets that are collected over the course of the month, Fastmarkets now proposes to assess and publish the price on Thursday, every two weeks.
The spodumene price has been surging quickly since the beginning of this year largely due to tightening supply from an accelerated adoption of electric vehicles (EVs). This has spurred a mounting demand for lithium, the downstream product of spodumene.
In addition, some spodumene operations in Australia were suspended in 2019-2020 when miners succumbed to weak market conditions.
Alita Resources’ Bald Hill mine was halted in August 2019. Albermarle and Mineral Resources put their jointly owned Wodgina mine on care and maintenance in November 2019. And Altura Mining went into administration in October 2020.
Currently, only Altura’s Pilgangoora project, which was renamed Ngungaju project, is scheduled to restart.
As a result, the tight availability of lithium feedstock has triggered more spot inquiries from consumers seeking to top up inventories once supplies via their long-term contracts with Australian miners can no longer meet their expanded operations needs.
In addition, spodumene suppliers have increased the negotiation frequency of contractual sales prices to keep them in line with the strong downstream chemical market. Certain suppliers are even considering negotiations on the basis of individual shipments, market participants told Fastmarkets.
Leading miners have started to hold spot spodumene auctions and tenders, with some attempting to discover the true market value of lithium feedstock in light of the disconnect between offtake prices and those in the emerging spot market. Such activities have added to the spot liquidities of the spodumene market.
Market participants broadly believe miners will continue to allocate more units of spodumene on the spot market in light of the EV market tailwind, which is fulfilling the prerequisite of a more frequent pricing cycle.
As such, Fastmarkets has decided to track this market on fortnightly basis in order to capture spot activities in a more timely manner.
The proposed new specifications are listed below, with the proposed amendment of price frequency in italics:
MB-LI-0012 Spodumene min 6% Li2O min, cif China, $/tonne
Quality: A mineral concentrate accepted by buyers for conversion in lithium chemicals used in battery applications (any size will be accepted) and with the following chemical composition: Li2O 6% (min 5.7 Li2O and max 6.1% Li2O accepted if it can be normalized to 6%); Fe2O3<1.3% (max 1.5% Fe2O3 accepted if it can be normalized to <1.3%); H2O<10%
Location: cif China
Timing: 90 days
Unit: USD/tonne
Publication: fortnightly, Thursday, 3-4pm London time
The consultation period for the above proposal will end one month from the date of this pricing notice, on Sunday September 26, with the amended frequency, subject to feedback, taking effect from Wednesday September 29.
With the potential amendment to the frequency of price assessment, the next price day will be Thursday September 30, followed by October 14, October 28, and so on.
All historical data relating to the assessment prior to the amendment will remain available in the pricing section of the Fastmarkets website.
To provide feedback on the cobalt hydroxide price assessments, or if you would like to provide price information by becoming a data submitter, please contact Dalila Ouerghi and Susan Zou by email at: pricing@fastmarkets.com. Please add the subject heading FAO: Dalila Ouerghi/Susan Zou re: spodumene price assessment.
To see all Fastmarkets’ pricing methodology and specification documents go to https://www.fastmarkets.com/about-us/methodology.

Susan Zou

susan.zou@metalbulletinasia.com

Published

Susan Zou

August 27, 2021

10:37 GMT

Shanghai