Chinese Lithium Carbonate prices rise to all-time high at Yuan 115,000/mt

HIGHLIGHTS

Higher offers quoted for September delivery. Processing margins likely to drive upstream prices

Lithium carbonate prices rose to an all-time high on Aug. 23 amid continued strong demand downstream.

S&P Global Platts assessed battery grade lithium carbonate at Yuan 115,000/mt on Aug 23, up Yuan 5,000/mt from Aug. 20 on a delivered, duty-paid China basis to break the previous high of Yuan 110,000/mt in the previous week.

Market sources said that the spike in prices came on the back of an increase in Chinese LFP (lithium iron phosphate) production, which utilizes lithium carbonate as opposed to other types of lithium-ion batteries.

Active buying interest was seen even with August volumes from producers being sold out. Spot cargoes for August delivery were largely only available from traders’ inventories.

The issue with buying from the secondary market is that the consistency in specifications can be different from existing stocks for the precursor makers, a producer said. There are still some buyers as the additional operational cost is preferable to buying at higher price levels for September-delivery cargoes, the producer added.

Offers for battery-grade lithium carbonate with September delivery were heard to be quoted at Yuan 120,000/mt from larger producers and around Yuan 110,000/mt for smaller or non-mainstream brands.

Prices for technical grade lithium carbonate also continued to rise with buyers utilizing it to produce lithium hydroxide, market sources said.

Offers were heard raised to Yuan 105,000/mt on Aug. 23, compared with a trade done at Yuan 100,000/mt on Aug. 20 on a wire-transfer payment basis.

Market participants expected the recent surge in downstream prices to carry over to prices for upstream products like spodumene.

Almost all spodumene volumes are sold into term contracts but there are expectations of a spot tender in the near future from one of the producers, a trader said. Given that processing margins are still attractive at the previous tender price of $1,250/mt FOB Port Hedland against lithium carbonate prices back then, there is still room for spot prices to rise, the source added.