Lithium Carbonate Prices Gained Another 2,000 yuan/mt to Near 480,000 yuan/mt with Potential Booming Demand

SHANGHAI, Aug 18 (SMM) - According to SMM data, the spot prices of domestic industrial grade-0 lithium carbonate today rise 2,500 yuan/mt to 460,000-467,000 yuan/mt, averaging at 463,500 yuan/mt. Compared with the average price of 451,000 yuan/mt on July 18, the month-on-month increase is as high as 9,500 yuan/mt or 2.1%.

The spot prices of battery-grade lithium carbonate also jump today to 476,000-482,000 yuan/mt, with an average price of 479,000 yuan/mt and an increase of 2,000 yuan/mt in a single day. The prices increased 10,000 yuan/mt or 2.1% from the previous month.

Recently, expanded power rationing in Sichuan has disturbed the lithium salt market. According to the latest survey of SMM, companies were forced to halt the production with intensifying power curtailment policy, leading to a tight supply of lithium carbonate in the short term. SMM estimates that owing to the power cuts, the total production cuts of lithium salt smelters in Sichuan might amount to 3,000 mt, and that of LFP plants will be 5,000 mt. Overall, different parts of the industry chain have all been affected.

At the same time, the downstream demand also saw certain decline amid the power rationing. This round of power crackdown will last until August 20. In the short term, the released capacity is likely to fall short of expectation due to environmental protection measures, power curtailment and other force majeure. But in the long run, with the increasing penetration rate of new energy vehicles, the demand for lithium carbonate will grow further.

Li Liangbin, chairman of Ganfeng Lithium, recently said that the lithium salt production capacity is rapidly increasing these days and might reach its new peak in the middle of 2023. As for the demand for lithium battery and capacity expansion, Li expected that the boom of the capacity would arrive in 2024-2025, after which time the rate of capacity expansion might slow down. At that time, the supply and demand of lithium salt might reverse, and the prices of lithium salt would probably face downward pressure.

In addition, the spot prices of spodumene concentrates (6%, CIF China) also climbed to $4,930-5,130/mt today after plateauing for a long time. Its average price stood at $5,050/mt, up $20/mt in a single day.

When it comes to the supply of lithium ores, SMM believes that the mining cycle of lithium ores is relatively long, so the resources released still falls short of the downstream demand for lithium battery in the short term, thus the shortage of ore mines will persists.

Meanwhile, the prices of refined cobalt also went up today. The spot prices of refined cobalt rose to 333,000-343,000 yuan/mt, with an average price of 338,000 yuan/mt and an increase of 3,000 yuan/mt in a single day. The average price was 23,000 yuan/mt or 7.3% higher than that on August 8. According to SMM survey, the refined cobalt stocks held by traders were generally low, and recently the future prices of refined cobalt were on the rise while its overseas prices remained relatively stable. Therefore, amid the bullish sentiments among traders, the prices of refined cobalt increased steadily.