China’s lithium prices continue downtrend amid weak futures market

Spot lithium prices in the CIF China, Japan and Korea (CJK) market remained unchanged over the week ended Thursday following sustained weakness of consumer demand. Elsewhere, in the Europe and United States spot market lithium prices remained rangebound in a low liquidity environment.

China

Spot lithium prices fell over the week to Thursday in China’s domestic market, which market participants attributed to major weakness in the futures market seen on Monday.

Fastmarkets’ weekly price assessment for lithium carbonate 99.5% Li2CO3 min, battery grade, spot price range exw domestic China was 107,000-110,000 yuan ($14,799-15,214) per tonne on Thursday, down by 3,000-5,000 yuan per tonne from 110,000-115,000 yuan per tonne a week earlier.

The most-traded lithium carbonate July 2024 futures contract on the Guangzhou Futures Exchange (GFEX) closed at 107,400 yuan per tonne on Monday, 7,250 yuan per tonne, or 6.32%, lower from the day’s opening at 114,650 yuan per tonne.

Since then, this contract price struggled to recover and has been hovering below 110,000 yuan per tonne. This contract closed at 108,500 yuan per tonne on Thursday, compared with the closing price at 117,350 yuan per tonne the preceding Thursday.

“With spot battery-grade lithium carbonate prices heavily linked to the futures contract prices, the futures price weakness result in the spot price weakness,” a Chinese lithium trader said.

Fastmarkets noted regular restocking demand of battery-grade lithium carbonate among consumers, but sources also pointed out that the current restocking was only on a hand-to-mouth basis, and was not super strong.

However, market participants continued to report the tightness of technical-grade lithium carbonate.

“I think currently only one major brine producer has some spot technical grade lithium carbonate, which are only available to a select number of customers. It’s really hard to find spot technical grade units now,” a Chinese cathode producer source said.

A second Chinese lithium trader said that some buyers were purchasing technical grade lithium carbonate and processing them into battery-grade and sell into the futures market for arbitrage, which the trader thought contributed to the tightness of technical grade lithium carbonate.

Fastmarkets’ weekly price assessment for lithium carbonate 99% Li2CO3 min, technical and industrial grade, spot price range exw domestic China was 100,000-105,000 yuan per tonne on Thursday, down by 5,000-6,000 yuan per tonne from 105,000-111,000 yuan per tonne the previous assessment.

The lithium hydroxide prices tracked the downtrend seen in the carbonate market. Some sources noted that the demand from the nickel-rich nickel cobalt manganese (NCM) battery sector still remained sluggish.

“It’s just the regular stocking demand from the consumers,” a second Chinese lithium producer source said.

Fastmarkets’ weekly price assessment for lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price range exw domestic China was 99,000-105,000 yuan per tonne on Thursday, widening downward by 1,000 yuan per tonne from 100,000-105,000 yuan per tonne a week earlier.

CIF CJK

Spot lithium prices in the CIF CJK market remained flat over the week to Thursday amid muted spot demand and limited spot transactions, while multiple sources noted the market was immune to the price swings in China’s domestic market.

“The demand for lithium is very terrible in Korea, including our company. It’s not just the battery demand that’s weak, the original equipment manufacturers (OEMs) also have very weak demand,” a South Korean consumer source said.

Another East Asian consumer source also noted a quiet market, while they are currently well stocked with no appetite for more spot materials.

Amid such demand, even though some Chinese lithium producers had spot offers for lithium hydroxide over the past week, none of them were concluded in the end.

“Spot demand for battery-grade lithium hydroxide is very slow, and we have just been honoring the long-term deliveries recently.” a third Chinese lithium producer said.

Fastmarkets’ daily price assessment for lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price cif China, Japan & Korea was $12.30-14.20 per kg on Thursday, unchanged since March 20.

Fastmarkets’ daily price assessment for lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices cif China, Japan & Korea was $12.50-14.00 per kg on Thursday, unchanged since March 18.

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