Lithium hydroxide, carbonate price gap widens on higher hydroxide demand

SHANGHAI, Jul 9 (SMM) – The price gap between battery-grade lithium hydroxide and carbonate is likely to widen further in the second half of the year as the former has seen higher demand, SMM believes.

While lithium carbonate prices lost around 50,000 yuan/mt since October last year amid oversupply, prices of battery-grade 56.5% lithium hydroxide remained firm at 135,000-150,000 yuan/mt, SMM data showed.

High downstream demand from the growing electric vehicle market contributed to the stable prices.

As of Friday July 6, battery-grade 99.5% lithium carbonate was assessed at 113,000-118,000 yuan/mt. This marked a record low in 28 months, compared with a high of 168,000 yuan/mt in late October last year.  

While both lithium carbonate and hydroxide are used to produce cathode materials for lithium-ion batteries, hydroxide produces more efficiently and is essential for some types of cathodes, such as nickel-cobalt-aluminium oxide (NCA) and nickel-manganese-cobalt oxide (NMC). 

Demand also rose for a certain specification of hydroxide – micro-power lithium hydroxide – which is of higher grade and performance. It requires an additional crushing process from ordinary lithium hydroxide, but the product's strong alkalinity and corrosivity makes this process difficult and therefore led to relatively higher prices. 

SMM estimates China's demand for micro-power lithium hydroxide from the cathode materials industry to stand at 7,000-10,000 mt this year. This accounts for 15-20% of China's the total supply of lithium hydroxide.