SSMM Analysis of Lithium Salt Fundamentals after Lithium Carbonate and Lithium Hydroxide Prices Lost Another 3,000 yuan/mt

SHANGHAI, Apr 20 (SMM) - According to the SMM data, the average spot price of domestic battery-grade lithium carbonate continued to decline after falling below the 490,000 yuan/mt mark yesterday, and fell by 3,000 yuan/mt to 485,500 yuan/mt today. As of today, the average spot price of domestic battery-grade lithium carbonate has dropped by 8,500 yuan/mt in just three days.
 The price of domestic battery-grade lithium hydroxide also fell along with lithium carbonate, down by 3,000 yuan/mt to 484,500 yuan/mt today. The price difference between lithium carbonate and lithium hydroxide has narrowed to 1,000 yuan/mt.

 The price of spodumene concentrate (6%, CIF China) is opposite to the performance of lithium carbonate and lithium hydroxide. Since April 1, the price of spodumene concentrate been moving all the way up, and the average price gained another $50/mt to $3,355/mt today.

Prices of lithium hexafluorophosphate is also not immune to the fate of falling amid growing supply. According to the SMM data, the average spot price of lithium hexafluorophosphate fell by 12,000 yuan/mt today to 450,500 yuan/mt, losing 24.79% from the high seen on March 9.

SMM data showed China’s lithium carbonate output stood at 26,178 mt in March, up 41% MoM and 42% YoY. Some leading smelters resumed production after maintenance and their output has returned to the full level seen before maintenance at the end of 2021. Some smelters saw their output climb after equipment upgrading or release of new capacity. Output in Qinghai also rose as weather warmed up.  

Entering April, smelters will encounter problems such as ore shortages and hindered imports under the impact of the pandemic. Some smelters will undergo shakedown tests on their new production lines. Despite release of new capacity, overall supply may increase only slightly. The domestic lithium carbonate output is estimated at 26,784 mt in April, up 2% MoM.

On the demand side, car and battery production has been impacted under the influence of the pandemic. Downstream buyers will not accept high LFP and LCO prices amid off-season in digital market. LFP plants report high inventory and falling orders. As such, lithium carbonate demand from many cathode material plants declined this month. Demand for low and high-nickel NMC material also dropped slightly under the influence of extreme nickel prices. It is expected that the overall demand for battery-grade lithium carbonate will fall 4% in April.