GLOBAL LITHIUM WRAP: Lackluster buying in China lithium market; Europe quiet but under pressure

By IM Staff, Carrie Shi
Published: Friday, 21 February 2020

China’s lithium prices held steady in the week to February 21, while a lack of downstream buying slowed spot market liquidity, domestic logistics resumed gradually and delays remained to be seen, sources said.

  • Battery-grade lithium carbonate and hydroxide prices held steady despite higher offers, while thin demand tempered spot buying.
  • Transportation resumed but delays still exist amid novel coronavirus (nCoV-2019) outbreak.
  • Asian seaborne market had limited spot deals with prices within the current range.
  • The European market consolidated previous falls but with some cheap offers still available.

Since China’s authorities allowed domestic business to return to work while continuing to enforce measures to control the outbreak of the novel coronavirus (2019-nCoV), more lithium market participants have returned to work by February 17.

Although, lithium business was more slow than usual this week due to a lack of downstream buying while downstream production and domestic logistics were not fully recovered.

Fastmarkets’ weekly price assessment for lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price range exw domestic China was 45,000-51,000 yuan per tonne ($6,399-7,252) on Thursday February 20, unchanged from the previous week.

"We just completed production resumption and will return next week. I haven’t had a new purchasing plan in the past two weeks," a cathode producer told Fastmarkets.

"Our prices have not changed for battery-grade carbonate this week even though current freight fees remain high. Fewer qualified and healthy drivers remained a key problem for trans-provincial transportation," a producer said.

Battery-grade lithium hydroxide prices stood firm at the current range this week, while spot buying kept thin with rare deals reported.

Fastmarkets’ lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery grade, spot price range exw domestic China was steady week on week at 52,000-57,000 yuan per tonne on Thursday.

"Battery-grade hydroxide prices remained firm this week due to higher transport fees. We can deliver small quantities in February, while large quantity deliveries will be done in March," a second producer said.

Asian lithium seaborne market rangebound
The cif China, Japan and Korea battery-grade lithium spot market was quiet this week with prices at a standstill. Most Asian buyers were in no hurry to buy and held watchful attitudes toward China’s lithium market.

Fastmarkets assessed the lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price at $8-9.50 per kg on February 21, while Fastmarkets’ assessment of the lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery grade, spot price at $9.50-11 per kg - both on a cif China, Japan and Korea basis and both unchanged week on week.

"I haven’t seen a particular change in the spot market this week. Though some higher hydroxide offers were heard, no transactions have been reported for the moment," a distributor said.

European prices static awaiting more clarity on China
In Europe and the United States, prices consolidated from previous falls for both carbonate and hydroxide grades amid a quiet spot market.

Fastmarkets’ weekly assessment for the lithium carbonate 99.5% Li2CO3 min, battery grade, spot price ddp Europe and US stood at $10-11 per kg on Thursday, unchanged from last week.

Fastmarkets’ assessment for the lithium hydroxide monohydrate 56.5% LiOH.H2O min, battery grade, spot price ddp Europe and US for the week to Thursday was $11-12 per kg, also stable from the previous week.

There were mixed views on the market direction in Europe and the US, Fastmarkets understands.

Some market participants think prices will be firmer prices in the short term, after the Chinese producer Ganfeng announced plans to increase its battery-grade lithium hydroxide prices by 10% on higher transport fees and production costs resulting from the coronavirus.

Some sources believe that other Chinese companies will follow suit and increase their prices as a result.

That said, for the time being there were some competitive offers from China for arrival in Europe in late March/ early April.

"There are some cheaper offers from China but it’s not fully affecting the market yet, but the deliveries arriving from China into the European market are not that big," one Europe-based producer said.

"The market is awaiting a clear direction in the following weeks," a second producer said.

All things considered, if the delays are extended, the disruptions could slow global demand for lithium from end users, such as electric vehicles, and ultimately hit prices, sources told Fastmarkets.

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 February 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.

More like this