Lithium price review and forecast

Lithium ore

Lepidolite prices rose in the week ending March 7, influenced by the sustained rise in lithium salt prices, prompting some producers to anticipate further hikes and adjust their quotes upwards. Demand side, Jiangxi's operating rate are still subdued, casting uncertainty on future market vigor. Nonetheless, as some SMEs gradually resume operations, their immediate raw material needs to sustain production are contributing to a marginal uptick in lepidolite prices.

In the week ending March 7, spodumene market prices maintained an upward trend. Domestically, many lithium miners are outsourcing processing business to lithium carbonate producers for delivery of futures contract as a hedge, resulting in notably higher direct sale prices for lithium ore. The lithium mine market experienced a surge in inquiries and price requests, leading to a temporary supply shortfall. Despite the uptick in lithium salt prices, buyers are wary of its sustainability and hesitant to accept raised lithium ore costs, thus refraining from large purchases at premium prices. Domestically, sufficient lithium mine inventory levels suggest no shortage, leading industry lithium salt producers to resist accepting higher lithium ore costs. Globally, Australian miners increased spodumene spot prices to above $1,000/mt, reacting to domestic futures recovery. Some firms moved from formula-based pricing to fixed pricing for spot lithium ore deals. Without a significant uptick in downstream production, cathode manufacturers may be less willing to pay high lithium salt prices, which could lead to a leveling off of lithium ore prices.

Lithium carbonate

For the week ending March 7, lithium carbonate prices saw an overall increase. Sellers maintained firm pricing for intermittent sales orders. In the market, barring maintenance-bound lithium salt firms in Jiangxi's Yichun area, most have restarted production as planned. Ignoring Jiangxi's environmental factors, domestic lithium carbonate production is anticipated to normalize gradually. Cathode producers indicate over 60% of their purchases are secured via longterm contracts and customer orders, leading them to buy lithium carbonate based on immediate need rather than
stockpiling. Hence, there's limited acceptance for prices over 110,000 yuan/mt. The lithium carbonate spot market is now largely a negotiation between suppliers and buyers, with price volatility expected to stabilize.

Lithium hydroxide

For the week ending March 7, lithium hydroxide prices rose. Battery grade lithium hydroxide firms maintain price support and are hesitant to sell, with key players holding back stocks due to bullish views on battery grade lithium hydroxide prices, focusing on long-term contracts over spot sales. As battery grade lithium hydroxide circulation in the market slows, downstream cathode manufacturers' buying eagerness has tempered. However, some cathode firms have modestly raised their bids to align with manufacturers' prices, over 90,000 yuan/mt, with the short-term trend remaining upward.

Please do not hesitate to contact Jean at jeantang@smm.cn or 86-19946295759 if you have any question or inquiry.