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Industrial|Logistics|Maintenance
Industrial|Logistics|Maintenance
industrial|logistics|maintenance

Chinese lithium prices rise on tight supply, other markets follow suit – Fastmarkets

7th January 2022

By: Donna Slater

Features Deputy Editor and Chief Photographer

     

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Cross-commodity price reporting agency Fastmarkets reports that Chinese lithium prices are rising as a result of constrained supply, with Chinese lithium consumers topping up their inventories and scrambling for available spot units in the past two weeks before logistics in China start to come to a halt ahead of the Chinese New Year holiday.

While the period over January 31 to February 6 is designated as a public holiday this year, it is common for Chinese workers to take time off beyond just the official days, the firm notes.

Fastmarkets’ price assessment for lithium carbonate (99.5% Li2CO3 and battery-grade lithium) shows that spot prices ranged between ¥300 000/t and ¥330 000/t ($47 025/t to $51 728/t) on January 6 – up by between ¥25 000/t and ¥40 000/t compared with a week earlier.

Fastmarkets notes that offers for battery-grade lithium carbonate continue to rise in China, mainly because of the increased demand from the ramp-up of lithium-iron-phosphate battery production this year and consumers restocking before the Chinese New Year holiday.

Spot units of battery-grade lithium carbonate have been scarce in China, with several major Chinese lithium producers already sold out, Fastmarkets learned from sources.

According to one of its sources, on the supply side, some Chinese lithium producers are in maintenance and their facilities are being shut down in January or during the Beijing Winter Olympics.

However, despite the current high prices for battery-grade lithium carbonate, market participants are still bullish, with Fastmarkets reporting that they expect prices to rise even further in the first quarter amid tight supply and firm demand. 

Meanwhile, the scarcity of technical-grade lithium carbonate – the typical feedstock for battery-grade lithium carbonate production – in the spot market is being widely felt among participants.

“Technical-grade lithium carbonate is extremely tight. Some producers cannot even fulfil their long-term contracts. And its price is very close to or even at the same level as that for battery-grade lithium carbonate,” a Chinese lithium trader told Fastmarkets.

BATTERY GRADE

Fastmarkets’ price assessment for lithium carbonate (99% Li2CO3 min, technical- and industrial-grade) spot price range in China was between ¥280 000/t and ¥290 000/t on January 6 – up by ¥10 000/t from a week earlier.

The scarcity of battery-grade lithium carbonate and its rapidly rising price also buoyed that of battery-grade lithium hydroxide in China, with limited supply providing additional support, reports Fastmarkets.

The firm’s spot price assessment for lithium hydroxide monohydrate (LiOH.H2O) (56.5% LiOH minimum and battery-grade lithium) in China ranged between ¥240 000/t and ¥250 000/t on January 6 – up by between ¥5 000/t and ¥10 000/t a week earlier.

Fastmarkets says the price gap between battery-grade lithium hydroxide and carbonate is wide enough for converting lithium hydroxide into carbonate.

As such, a Chinese lithium producer told the firm that the price of lithium hydroxide of the same grade was also driven up, since demand increased with such conversions taking place.

A second Chinese lithium trader also told Fastmarkets they were not selling battery-grade lithium hydroxide spot units but having them converted into lithium carbonate of the same grade. “Considering the current price gap and a processing fee of around ¥10 000/t , this brings more margins,” said that source.

Another Chinese lithium producer source pointed out to Fastmarkets that spot supply of battery-grade lithium hydroxide was also low, with many producers not having a lot of stock.

Further, East Asian lithium prices have rallied on Chinese strength prices for seaborne battery-grade lithium in the wider East Asian region, the firm reports.

A separate Chinese lithium producer told Fastmarkets that as China is the main lithium producer in the world, when China’s lithium prices rise, the East Asian seaborne market will follow suit.

Spot prices for lithium in Europe and the US also rose in the first pricing session of this year following the uptrend in China’s domestic market and the East Asian seaborne market, with sources continuing to report to Fastmarkets tight availability of technical-grade compounds. 

A seller told the firm that the largest market is in Asia so other regions are just following what happens in China and in East Asia.

A lithium hydroxide seller source concurred, saying that what they felt is that in the past nine to 12 months is that the global lithium market is just following what China is doing.

“We are also continuing to see at the beginning of the new year the tightness in the market, with distributors and buyers in different locations struggling to get hold of available units,” that source said.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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