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Industrial-grade lithium carbonate sees improving liquidity in Chinese market

Highlights

Chinese salt lake producers seek to lower stocks

Battery-grade prices supported on tight supply

  • Author
  • Jun Kai Heng
  • Editor
  • Debiprasad Nayak
  • Commodity
  • Metals

Industrial-grade lithium carbonate saw liquidity improving in the domestic Chinese market for the first time in several weeks as salt lake producers began offering their inventories, market sources said.

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This is in contrast with battery-grade lithium carbonate which has witnessed a slowdown in liquidity.

Chinese salt lake producers are seeking to lower inventories to make room for higher production levels amid better current prices basis their earlier production costs, a refiner source said.

Several traders indicated that the offers were largely open only to downstream end-users and not to traders, and were indicative of general confidence in support towards current price levels.

Large producers generally prefer to prioritize selling to end-users as opposed to traders and these offers are signs of healthy downstream demand, a Chinese trader said.

Trades were heard to be done around Yuan 480,000/mt on a delivered, duty-paid (DDP) basis in China for industrial-grade lithium carbonate with offers around Yuan 480,000-485,000/mt.

Smaller precursor-makers who were able to utilize industrial grade cargoes for production were heard to be actively buying due to the Yuan 20,000/mt spread between industrial and battery grade lithium carbonate.

Market participants expected continued pressure on prices for battery-grade lithium carbonate on the contrary with a lack of liquidity observed.

Offers were heard to be around Yuan 500,000/mt on a DDP China from larger producers March 24, down from earlier offers at Yuan 505,000/mt.

Limited buying interest was heard from both traders and precursor makers at current price levels due to a lack of downstream or reselling margins.

While there were trades heard to be done at Yuan 520,000/mt for battery-grade lithium carbonate, these were understood to be for volumes smaller than a truckload.

In spite of lowering offers, downstream buyers expected little room for a further weakening in prices given the overall tightness in upstream supply.

Refiners are unlikely to lower their prices too much given rising prices for upstream raw materials and it is likely that current price levels will be well supported, a precursor-maker said.