SHANGHAI, Jan 3 (SMM) - In the last week of 2022, the cobalt and lithium market ended with a decline. The cobalt and lithium market still failed to reverse the downward cycle. In particular, the prices of battery-grade lithium carbonate lost 34,000 yuan/mt in just one week.
Cobalt market
As of December 30, spot prices of refined cobalt fell further to 311,000-335,000 yuan/mt, with the average price down 4,000 yuan/mt or 1.22% from December 23 to 323,000 yuan/mt.
Demand from alloy and magnetic material producers was weak. The ex-factory prices of major refined cobalt manufacturers were lowered. Smelters were keen on the production of refined cobalt over cobalt salt due to more lucrative profits of the former, putting the former at risk of oversupply and price cuts.
In terms of cobalt sulphate, the decline in cobalt sulphate prices was slightly slower than that of refined cobalt. On December 30, the spot price of cobalt sulphate stood at 47,500-48,500 yuan/mt, with an average price of 48,000 yuan/mt, a drop of 3.52% from December 23. According to recent research by SMM, the supply of cobalt sulphate in the market was still relatively ample. Affected by the domestic pandemic situation and the decline in terminal demand, along with massive destocking by battery makers, mainstream cathode active material plants lowered operating rates sharply, with some being closed around the New Year's Day. The overall cobalt sulphate market was quiet. SMM expects that the quotation of cobalt sulphate will still have room to fall with the decline in lithium prices.
Lithium market
As of December 30, the SMM spot quotations of battery-grade lithium carbonate were 499,000-525,000 yuan/mt, and the average price was 512,000 yuan/mt, which was 34,000 yuan/mt or 6.23% lower than on December 23. Lithium carbonate prices slumped last week. Most lithium salt smelters lowered their quotations drastically. Only a few smelters held their offers firm as they were in no rush to sell after completing their annual targets and maintained stable delivery to their long-term customers. Cathode active material (CAM) plants generally reported declines in their orders and held adequate lithium salt that could sustain one month of production. Due to bearishness towards lithium salt prices, some CAM plants even dumped their own lithium salt inventories, exacerbating the price drop. There was a stalemate between lithium salt smelters and CAM plants over the long-term contracts in 2023, and this situation will extend until January. Traders cut their quotations further. Lithium carbonate prices are forecast to remain in a downward trajectory in the short term amid strong bearish sentiment.
As for lithium hydroxide, the spot quotations of battery-grade lithium hydroxide followed lithium carbonate prices down. As of December 30, the SMM spot quotations of battery-grade lithium hydroxide were 510,000-557,000 yuan/mt, and the average price was 533,500 yuan/mt, which was 18,500 yuan/mt or 3.35% lower than on December 23. The prices of lithium hydroxide continued to fall last week. The top-tier lithium hydroxide smelters still focused on exports due to the large price difference between home and abroad. Superior quality and stable supply under long-term orders allowed them to hold their offers firm. Others mainly targeted the domestic market and their quotes fell steeply. A slight fall in demand caused overseas prices to inch lower. The short-term lithium hydroxide production is expected to hold stable, while downstream demand has fallen, weighing on its prices. CAM plants refrained from buying and were bearish towards future lithium hydroxide prices. The top-tier smelters still sold battery-grade lithium hydroxide at high prices. Lithium hydroxide prices are expected to extend the declines, but the fall may be smaller than that of lithium carbonate.
