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Chinese lithium carbonate hits all-time high again in post-holiday market


Producers prioritizing term contract customers

Limited spot availability for technical grade

  • Author
  • Jun Kai Heng
  • Editor
  • Haripriya Banerjee
  • Commodity
  • Metals
  • Tags
  • Lithium

Domestic Chinese lithium carbonate prices surged to another historical high Sept. 22, as market participants returned from the two-day Mid-Autumn Festival holidays.

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S&P Global Platts assessed battery grade lithium carbonate at Yuan 182,000/mt on Sept. 22, on a delivered, duty-paid China basis. The price was up Yuan 12,000/mt from the previous record high of Yuan 170,000/mt assessed on Sept. 21.

Platts started assessing Chinese battery grade lithium carbonate on Sept. 7, 2018.

Market sources said there was limited trading liquidity, with producers prioritizing negotiating their term contracts with existing customers for October delivery.

Most producers are not offering spot cargoes to the wider market until their term contracts and volumes have been fixed, a China-based trader said.

Precursor makers typically settle their procurement contracts with producers for the following month delivery towards the end of the current month, although rapidly rising prices have pushed some to begin buying spot volumes ahead of time.

Limited supply

The lack of supply to meet growing demand has led to price spikes, and some buyers have bought available September delivery cargoes to stockpile ahead of production.

Market participants said that the settlement of term contracts could greatly impact the spot market for October with precursor makers having to secure spot supply for unmet demand. In addition, levels at which term contracts were being settled were seen as the pricing floor for spot trading.

Some suppliers were asking for Yuan 180,000/mt for October-delivery battery grade lithium in their term negotiations, which -- if accepted by buyers -- will likely drive spot prices to Yuan 190,000/mt or above, a precursor maker said.

Settled term contracts and volumes will also have an impact on prices for technical grade cargoes given that refiners will set their production ratios based on the take-up rates of contract volumes, market sources said.

Producers can quote wide ranging prices for technical grade lithium carbonate due to the different production ratios and availability, a lithium converter source said. Given the current market and expectations of continued limited supply of technical grade cargoes, buyers for technical grade will have less negotiating power as compared to battery grade buyers, the source added.

Spot offers for Qinghai salt lake-produced technical grade cargoes were heard to be around Yuan 180,000/mt, from third party dealers.