Lithium Price Review and Forecast

Lithium ore

In the week ending April 18, lepidolite prices stabilized following a recent rise as lower lithium carbonate prices loosened the firm pricing stance of some miners and traders. However, with downstream smelting operations passing environmental checks and resume operations, there’s been a rise in stable demand for lepidolite. The current market shortage and recovering demand helps support prices. Looking ahead, lepidolite prices are expected to remain stable, albeit with slight weakness.

In the week ending April 18, spodumene prices have remained relatively stable despite a minor fall due to declining lithium salt prices. Strong bargaining power and sufficient cash flows at operational mines overseas have helped maintain lithium ore prices. Lithium salt plants are recovering from previous loss issues and are now operating at high capacity. In April, spodumene converted lithium salt production is expected to increase by about 16% MoM. Major lithium salt producers, with extensive long-term contracts and ample inventories, face no real supply shortages. Consequently, lithium ore prices are projected to remain stable in the near term.

Lithium Carbonate

Lithium carbonate prices declined slightly in the week ending April 18. From mid to late March, production rebounded as lithium salt producers resumed operations post-maintenance and driven by a desire to restore profitability. This increase in production, along with lithium carbonate imports from Chile, significantly enhanced market supply. However, demand growth has not kept pace and has slowed compared to March. Although liquidity in the spot market for lithium carbonate has improved, it remains constrained. Current price trends are influenced by several factors, including producers' reluctance to sell in small quantities, the stabilizing effect of futures and trade markets, and pre-Labour Day stockpiling by downstream cathode producers. As a result, the spot market liquidity for lithium carbonate will remain tight in the short term, with prices expected to continue moving sideways for now.

Lithium hydroxide

Lithium hydroxide prices saw a modest decrease in the week ending April 1, primarily due to a recent drop in lithium carbonate prices and the emotional and cost factors affecting some smelters. Overall, inventory levels in the lithium hydroxide sector remain relatively low. As downstream demand continues to grow and smelters grapple with limited stock and delivery challenges, there's a prevailing tendency among smelters to hold back from selling. On the demand side, steady growth continues for high-nickel products downstream. With the upcoming Labour Day holiday, transportation restrictions for nearly a week on lithium hydroxide, classified as a hazardous chemical, are prompting downstream cathode companies to engage in preemptive stockpiling. The supply-demand situation in the industry remains tight, and in the short term, price trends are expected to remain stable.

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