GLOBAL LITHIUM WRAP: Chinese battery-grade lithium carbonate prices extend downtrend

By Martim Facada
Published: Friday, 03 August 2018

China’s domestic spot battery-grade lithium carbonate prices continued dropping this week with most producers offering lower prices to boost sales, while battery-grade lithium hydroxide prices were static despite pressure for lower prices.

  • Lithium carbonate battery-grade spot prices continue downtrend due to lower offers and weak downstream demand.
  • Lithium hydroxide battery-grade spot prices held unchanged despite downside pressure on prices.
  • Prices for technical and industrial-grade lithium carbonate material, typically purified into battery-grade material, stable despite a push for lower prices. 
  • Spot markets in Europe and the US flat.

The spot battery-grade lithium carbonate Chinese domestic prices have moved down slightly this week due to Chinese producers decreasing their offers. 

Downstream consumers remain cautious on whether to procure more material, while waiting for the market to reach the bottom. 

Industrial Minerals assessed the Chinese domestic spot battery-grade lithium carbonate price (min 99.5% Li2CO3) at 94,000-102,000 yuan ($13,754-14,925) per tonne on Thursday August 2, down week on week from 98,000-105,000 yuan per tonne. 

Chinese domestic technical and industrial-grade lithium carbonate prices (min 99% Li2CO3) have stalled at 80,000-85,000 yuan per tonne week on week on August 2, after weeks of decreasing prices.

"Lithium prices have fallen week by week recently, and weak demand is one of the major reasons for the price decrease," a lithium producer told Industrial Minerals. "Most buyers are holding off on purchasing materials as they await lower prices, while others purchased small quantities on a weekly basis."

"Battery-grade qualified lithium-carbonate material prices remain slightly above 100,000 yuan per tonne, however, non-purified lithium-carbonate material is being traded close to 20,000 yuan per tonne below this price level," a second lithium producer told Industrial Minerals. 

Prices for lower technical and industrial-grade lithium carbonate, supplied from the Qinghai and Tibet regions and often termed as non-purified battery-grade material, have been the leading cause of the decrease in Chinese lithium carbonate prices in recent months. 

Slow consumption and the transitional four-month period for electric vehicle (EV) subsidies in China have also played an important role in the downturn. 

The government is supporting new subsidies that prioritize new energy vehicles (NEVs) with longer driving ranges and improved battery performance. This has temporarily decelerated the consumption of lithium compounds, while battery-makers adapt their battery-cathode technology to adopt higher nickel-content cathode such as NMC 622 and NMC 811.

Battery-grade lithium hydroxide prices were unchanged this week because demand from downstream buyers has not picked up, despite lower offers reported in the spot market amid limited transactions.

Industrial Minerals assessed the battery-grade lithium hydroxide monohydrate (min 56.5% LiOH.H2O) price at 125,000-135,000 yuan per tonne on Thursday August 2, unchanged from the previous assessment.

"Chinese domestic spot lithium hydroxide battery-grade prices currently have a big price range. Major producers in China keep offering material from factories well above 130,000 yuan per tonne but smaller-sized producers are offering their material as low as 120,000 yuan per tonne and below," a trader told Industrial Minerals. 

"Despite all this, we would place the bulk of the market within a price range of 125,000-135,000 yuan per tonne," the trader added. 

Seaborne prices flat
Seaborne prices for battery-grade lithium, cif China, Japan and South Korea, were also flat week on week amid constant negotiations and conversations to lock in material, but a lack of concluded deals. 

The expectation that prices on the Chinese domestic spot market will keep moving down has frozen seaborne spot market activity, while consumers wait for the market to reach its bottom, producers and consumers spoken to by Industrial Minerals said. 

Industrial Minerals assessed the price of battery-grade lithium carbonate (min 99.5% Li2CO3) at $17-19 per kg on August 2, flat from last week.

Meanwhile, the price of battery-grade lithium hydroxide monohydrate (min 56.5% LiOH.H2O) was assessed at $19-20 per kg on a cif China, Japan and South Korea basis, similarly unchanged.

"The seaborne spot China, Japan and Korea market has been quite slow despite many talks with buyers," a third producer told Industrial Minerals. "In China, the spot market remains more active, with different, new, smaller producers trying to sell material abroad to take advantage of lower prices."

"We have been trying to achieve prices close to the $20 per kg price level for both battery-grade lithium carbonate and hydroxide, but the availability of lower prices from China in the seaborne market has frozen consumption," a second trader told Industrial Minerals added.

European, US prices unmoved
European and US spot prices for battery-grade lithium carbonate and hydroxide compounds have mimicked the wait-and-see attitude in the seaborne Asian market, as reported to Industrial Minerals. 

Summer holidays, lower price expectations and a traditionally quieter spot market in Europe and the US, attributed to the smaller size of the battery industry in those regions, have kept prices unchanged. 

Industrial Minerals assessed prices for battery-grade lithium carbonate, min 99.5% Li2CO3 at $17-19 per kg, ddp Europe and US, on August 2, while lithium-hydroxide monohydrate, min 56.5% LiOH H2O, spot prices were assessed at $18.50-20 per kg, ddp Europe and US, on August 2, both flat with the previous week’s assessment on July 26.

"We have been playing a small role in the lithium carbonate and hydroxide spot market over the past weeks, but the market has been quite flat due to the resistance to procure more material in the US and European regions," a fourth producer told Industrial Minerals.

"Our lithium carbonate price offers are situated within MB’s lithium price range, however; there’s been no deals so far this week. The European and US spot market is considerably slow due to the summer period," a distributor told Industrial Minerals. 

Industrial Minerals’ trade log for battery-grade lithium carbonate in China for August includes all trades, bids and offers reported to Industrial Minerals.

Learn more about Industrial Minerals' lithium pricing methodology and read the latest lithium price spotlight here.

All lithium carbonate, hydroxide and spodumene prices are available in our Battery Raw Materials Market Tracker. Get a sample of the report here.