China’s lithium carbonate prices to extend decline in H2 on sufficient raw materials

SHANGHAI, Aug 13 (SMM) – Lithium carbonate prices in the Chinese market are likely to extend their declines in the remaining months of the year and average at 100,000 yuan/mt due to sufficient raw material supply, SMM believes.

Battery-grade lithium carbonate price climbed over 37% from the start of 2017 to a peak of 171,000 yuan/mt, SMM assessment showed. The price took a U-turn in November last year, however, and the declines have accelerated after Chinese New Year this year.

At 97,500 yuan/mt, SMM assessment currently stood at the lowest level in close to three years.

At the end of 2017, China’s ore inventory could produce 60,000 mt of lithium carbonate equivalent, while additional stocks in the first quarter of this year could produce 16,000 mt of lithium carbonate.

Imports of lithium ore are also likely to continue to increase this year on growing shipments from mines in Western Australia. Lithium concentrate prices have dropped over 20% over the past three months.

While the construction of some new lithium salt capacity progressed slower than expected, downstream consumers’ buying interest still withered against the backdrop of ample raw material supplies.

In fact, buyers of lithium carbonate were heard to only pay after cargoes were delivered during the second quarter. This compared with monthly orders and advanced payment previously.