Supply surplus lowers prices of spodumene concentrate in Mar

SHANGHAI, Apr 24 (SMM) – Prices of seaborne spodumene concentrate in China fell in March as more suppliers entered the market and as domestic demand failed to meet supply.

Import prices of spodumene concentrate averaged $660/mt in March, down 15% from February, according to China Customs.

Customs data also showed that about 163,000 mt of spodumene concentrate imports entered China in March, up 19% month on month and 55.7% year on year. Imports in January-March stood at 445,000 mt, up 11.8% from the October-December period of 2018 and 58% from a year ago.

Spodumene concentrate originated from such as Brazil, hinting at the end of the monopoly of Australia-based Galaxy Resources on the Chinese market.

Galaxy said in its report for the quarter ending March 31 that it shipped just 15,192 dmt of spodumene concentrate, down 62% on the previous quarter.

If 1 mt of lithium carbonate can be produced from 8 mt of spodumene concentrate, concentrate imports in the first three months of 2019 equated to 55,600 mt of lithium carbonate equivalent (LCE), while only 30,400 mt of LCE of concentrate was consumed across Chinese smelters in the same period. This resulted in a supply surplus of over 20,000 mt of LCE.

Maintenance and production suspension during the Chinese New Year holiday as well as slower-than-expected capacity ramp-up at new smelting projects slowed the consumption of spodumene concentrate.

SMM expects prices of spodumene concentrate to extend their losses, but the commissioning of new smelting projects will likely slow the declines.