Lithium prices rally cobalt prices correct

The lithium carbonate CIF Asia price rose 11% in March to $10,000 per tonne — the biggest monthly increase since the price recovery began in January. There are signs prices are nearing a peak, however, with an improving supply outlook.

Cobalt prices declined sharply at end-March and into April on expectations of an easing supply-chain bottleneck; prices stabilized at $22.60 per pound April 16.

• China's passenger plug-in electric vehicle, or PEV, sales totaled just under 500,000 units in the March quarter, with full-year sales on course to exceed 2 million units.
• Ex-China passenger PEV sales will also benefit from the wider auto sector sales recovery in 2021 in addition to support from tighter emissions regulations.
• The U.S. PEV sector has welcomed the news of a $2.3 trillion infrastructure plan and the settlement between SK Innovation Co. Ltd. and LG Chem Ltd., which will spur PEV uptake and domestic supply chains.
• We forecast the lithium carbonate CIF Asia price to average $9,900/t in the June quarter, down from the March level.
• We maintain the view that cobalt prices are likely to trend downward as supply-chain disruptions continue easing through the June quarter, with the full-year price averaging $17.97/lb.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.