SHANGHAI, Jun 19 (SMM) – Producers of spodumene concentrate are more likely to turn to spot trades, instead of transactions under long-term agreements, after a supply glut created a buyers' market, SMM expects.
Slower-than-expected commissioning of new smelting capacity in China slowed the sales of spodumene concentrate in the second quarter and caused a significant glut in the market.
This drove Australian lithium mining company Pilbara Minerals to expand spot sales, as consumers under the long-term contracts failed to pick up cargoes as scheduled.
The miner also planned to hold back on production from Pilgangoora mine and work on plant improvements until at least the end of July, while customers ramping up capacity in China.
Excessive supply also changed the frequency of pricing for spodumene concentrate, from annually to semi-annually or quarterly. New pricing models linked to the prices of lithium salts were also seen in the market.
Pilbara Minerals planned to moderate output in the short term, to 20,000-24,000 dmt in June, while its customers continue to work on processing facilities in China.
The company said spodumene concentrate pricing continued to soften, currently in a range of approximately $600-640/dmt cfr China.