Albemarle Lithium Mine Tender Analysis

The Albemarle spodumene tender held on March 26 has come to an end, with the final result being 9,372 yuan/ton (grade 5.76%, domestic spot tax included). The price is approximately US$1,198 after discounting by 6 grades and converted into CIF price, which is basically the same as the final transaction price in Pilbara on March 14. At the same time, Albemarle also stated that it will conduct another spodumene tender on April 24.

According to the agreement of this tender, Albemarle will not disclose the winning bidder. Therefore, when calculating the cost of lithium carbonate corresponding to this batch of spodumene, there is a certain gap in the processing cost when compared to the traders working with agents. Coupled with the difference in freight, it is initially estimated that the total cost of lithium carbonate is about 104,000 -115,000 yuan. According to SMM's research, companies are less willing to receive spodumene concentrate at this price, especially after the lithium carbonate price dropped this week. Some participants in this bidding told SMM that considering the final price point of the bidding, they may not participate in similar spodumene bidding activities again in the future.

However, refer to the spodumene prices this week , the price of lithium ores have not begun to fall with the price of lithium salts. Some overseas miners are actively exploring and trying new pricing mechanisms in an attempt to decouple ore prices from domestic lithium salt prices. As early March, 6% Australian spodumene concentrate had a quotation of US$1,200, but the actual transaction has not yet reached that price. With Pilbara and Albemarle tried to discover the new price mechenism in mid-March, overseas mining companies are still very enthusiastic about pushing up prices, the tentative underwriting price is fluctuating around US$1,100.

Looking at Chinese domestic market, although there has been a slight decrease in buyer inquiries and purchases this week, the scarcity of spot circulation domestically has kept transaction prices from easing. Currently, the bulk of domestic spodumene inventory remains with smelters, while some traders holding spot goods tend to seek lithium carbonate processing due to low profitability from direct sales of lithium ore. Additionally, the tender prices of Albemarle have to some extent strengthened the price-supporting mentality of lithium mine holders. As a result, domestic spot transaction prices remained relatively high until the end of this Wednesday, resulting in fewer transactions.

Looking ahead, overseas companies are interested in normalizing such lithium mine tender activities. This will continue to amplify the volatility of the prices. Furthermore, the involvement of non-lithium salt production-related enterprises in lithium mine price discovery may change the lag effect between lithium ore and lithium salt prices. However, the production enterprises without stable sources of lithium ore are still the ones ultimately severely affected. Additionally, this year, there are still expectations of oversupply and capacity reduction in the upstream of the lithium battery industry, putting considerable pressure on the operation and survival of some small and medium - sized smelters. The advantage of stable costs for proprietary mine enterprises will continue to expand the concentration of leading companies in the lithium salt industry. Although the enthusiasm for entering the lithium salt industry has waned, the industry's future still holds promise.

For more inforamtion, please contact: cathycai@smm.cn