South Korea lithium carbonate imports surge in September

By Carrie Shi, Dalila Ouerghi
Published: Tuesday, 17 November 2020

South Korean imports of lithium carbonate compounds more than doubled in September 2020, with increased demand from restocking by cathode and battery manufacturers ahead of an expected surge in prices, sources have told Fastmarkets.

According to data released by the South Korean customs office, imports of lithium carbonate salts into the country totaled just over 4,039 tonnes in September, up by more than 100% month on month from 1,971 tonnes in August, and up by 47% from September 2019.

SKorea lithium salts imports 2018-20
South Korea lithium salts imports

South Korea traditionally imports a large amount of lithium carbonate salts from South America, and particularly from Chile.

The surge in imports came amid strengthening spot prices in recent weeks for technical and battery grades of lithium carbonate in one of the most active global lithium markets, China.

“I think the growth in September in imports of lithium carbonate in South Korea was meeting an inventory cycle with more materials delivered there that month, or some buyers that needed to fulfil annual contract requirements started to increase their purchasing,” a producer told Fastmarkets on Tuesday November 17.

“Buyers in South Korea started to restock inventory in September on the gradual recovery of the market from the Covid-19 pandemic,” a second producer said.

“In my opinion,” a distributor said, “the rise in South Korea’s imports of lithium carbonate was because buyers were trying to fulfil contracts. Compared with last year’s imports into South Korea, their import volumes in September this year were around 50%, so I think they still need to import increasing volumes every month from now on.”

Chinese lithium carbonate prices go higher

Chinese lithium carbonate spot prices have gained ground in recent weeks amid rising demand in the country for lithium-iron-phosphate (LFP) batteries, which tend to use lithium carbonate as a key material.

After three weeks of consecutive increases in October, Fastmarkets assessed the lithium carbonate 99.5% Li2CO3 min, battery grade, spot price range, exw domestic China, at 40,000-41,000 yuan ($6,081-6,234) per tonne on November 12, unchanged for two weeks. This was, however, up by 3.8% from a recent low of 37,000-41,000 yuan per tonne between July 9 and October 8.

Similarly, the spot markets for technical and industrial grades of lithium carbonate have also stabilized over the past fortnight, following earlier increases.

Fastmarkets’ latest assessment of the lithium carbonate 99% Li2CO3 min, technical and industrial grade, spot price range, exw domestic China, was 34,000-36,000 yuan per tonne on November 12, widening upward by 1,000 yuan from 34,000-35,000 yuan per tonne.

According to Chinese customs data, China imported 5,218 tonnes of lithium carbonate salts in September, up by 53.74% from August and a more than twofold increase from September 2019, when a total of 2,042 tonnes of lithium carbonate salts was imported.

Meanwhile, China only exported 677 tonnes of lithium carbonate salts in September, down by 32.37% from August and down by 28.59% from September 2019.

Lithium is a key raw material widely used in batteries for new electric vehicles (NEVs), and the recent upward price trend was underpinned by the recovery seen in the country in the NEV sector, with lithium producers reluctant to reduce their offers amid falling stocks and increased downstream demand.

“The rise in South Korean imports may be a result of companies having to take-up material they have contracted for, before the end of their contract term,” William Adams, head of battery raw materials and base metals research at Fastmarkets, said.

“[But] it is also likely that they need to increase throughput of lithium salts to keep up with demand from the [original equipment manufacturers] because EV production schedules are ramped up, with sales showing extra-strong growth,” he added.

Daniel Jimenez, founder of Chile-based mining consultancy Ilimarkets, added: “Probably, the increased import rate now has to do with the fact that excess inventory, which had been built up late in 2019 and early in 2020, has been consumed and, from now on, imports will be more in line with actual consumption.”

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