- Chinese lithium prices down further amid minimal spot demand and bearish sentiment
- East Asian lithium prices dragged down by Chinese market and buyer caution
- Europe, United States lithium spot complexes follow suit but maintain a premium
Spot lithium prices in China remained under downward pressure from minimal spot demand and bearish sentiment stemming from a pessimist outlook on the recovery in lithium demand.
“The spot lithium prices are still falling very fast in China, because there is almost no demand for any spot units,” a Chinese lithium trader said.
Multiple Chinese cathode producer sources told Fastmarkets that they did not purchase any spot material in recent weeks due to insufficient order books from downstream battery producers.
“We have only purchased one or two trucks of battery-lithium carbonate over the past week and only buy what we need,” a Chinese cathode producer source said.
“Lithium carbonate prices are still falling too fast and we’re afraid to buy now [in expectation of more price decreases],” a second Chinese cathode producer source said.
Battery-grade lithium carbonate prices below 200,000 yuan per tonne emerged in the spot market, a level that was a psychological barrier among market participants in previous weeks.
“Downstream cathode producers have lowered their production rates amid weak demand from the battery sector. Therefore, amid limited demand for lithium salts, lithium prices will continue to fall despite any efforts from sellers to keep the prices from falling further,” a Chinese lithium producer source said.
The lithium hydroxide market also faced the same weakness in demand.
“Offer prices for lithium hydroxide are not the most important [market] factor right now, it’s demand. Right now, there is no demand. So there are no buyers regardless of the offers,” a second Chinese lithium producer source said.
Market participants also spoke of large spot market inventories of both lithium carbonate and hydroxide over the past week, accumulated since December last year when lithium demand started to wane.
“Spot market inventory is also pressing down prices, since some sellers with large stocks are desperate to destock and utilize aggressively low offers,” a second Chinese lithium producer source said.
Fastmarkets’ price assessment for lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price range, exw domestic China was 168,000-210,000 yuan ($24,427-30,534) per tonne on Thursday, down by 20,000-42,000 from 210,000-230,000 yuan per tonne a week earlier.
Fastmarkets’ price assessment for lithium hydroxide monohydrate, LiOH.H2O 56.5% LiOH min, battery grade, spot price range, exw domestic China was 260,000-320,000 yuan per tonne on Thursday, down by 60,000-70,000 yuan per tonne from 330,000-380,000 yuan per tonne a week earlier.
East Asian lithium prices further retreat amid Chinese downtrend
Spot lithium prices in East Asian markets further declined over the recent week, weighed down by buyers’ efforts to obtain price parity with those in China. Large inventories in China added to the downward pressure.
Given the wide spread of lithium prices between the East Asian and domestic Chinese markets, many buyers expected to purchase spot materials at the levels seen in the Chinese domestic market, which are currently lower than those in East Asia.
“Some East Asian buyers are quoting spot lithium salts on a Chinese yuan per tonne basis, rather than on a US dollar per kg basis to press down the prices,” a Chinese lithium trader told Fastmarkets.
The majority of lithium sellers, especially international lithium sellers, were hesitant to agree to such prices, which supported a premium that East Asian lithium prices held over their domestic Chinese equivalents.
In addition, lithium buyers in East Asia continued to prolong to the negotiation process of spot deals, which would likely further press down prices because the current downtrend is still ongoing and prices would continue to fall during negotiations, multiple sources told Fastmarkets.
“Many Chinese lithium producers have actively approached, to ask if I have any demand for spot lithium hydroxide. In the previous year, the market was tight and we had to actively approach them for any spot availability and there was no guarantee that we could secure any at that time,” an East Asian consumer source told Fastmarkets, adding that they have no need for spot material at the moment.
“We don’t see much demand for spot material. Our customers mainly feed on long-term supply, and we haven’t had any spot deals for some time,” a third Chinese lithium producer source said.
Fastmarkets’ daily price assessment for lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices cif China, Japan & Korea was $38-42 per kg on Thursday, down by $2-3 per kg from $40-45 per kg a day earlier, and down by $9-10 per kg from $47-52 per kg a week earlier.
Fastmarkets’ daily price assessment for lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price cif China, Japan & Korea was $50-55 per kg on Thursday, dwn by $5 per kg from $55-60 per kg a day earlier, and down by $9 per kg from $59-64 per kg a week earlier.
Europe, US lithium spot prices track Asian downtrend
Spot lithium prices drifted lower across the board over the past week in response to weakness in the domestic Chinese market. But spot prices maintained a premium because sellers insisted on higher offer prices and reported a lag in weakness filtering from Asia.
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