Slower-than-expected supply growth steadies prices of lithium carbonate in H1-Shanghai Metals Market

Hot Keywords

  • Zinc
  • Market commentary
  • Copper scrap
  • Copper
  • Aluminium
  • Nickel
  • Steel
  • Futures movement
  • Nickel sulphate
  • price
  • MMi Iron Ore Port Index
  • Inventory data
  • Evening comments
  • Morning comments
  • Macroeconomics

Slower-than-expected supply growth steadies prices of lithium carbonate in H1

SMM Insight 02:01:44PM Jul 08, 2019 Source:SMM

SHANGHAI, Jul 8 (SMM) – Prices of battery-grade lithium carbonate across Chinese markets held stable in the first half of this year, as capacity constraints slowed the supply growth and as frontloading ahead of new energy vehicle subsidy cuts and brisk demand for lithium iron phosphate (LFP) supported demand.

Chinese manufacturers produced 67,500 mt of lithium carbonate in January-June, up 29% year on year and 5% from July-December of 2018, driven by Ganfeng Lithium, Sichuan Nengtou Dingsheng, Nanshi Lithium and China Minmetals Salt Lake, showed an SMM survey.

The growth was slower than expected, dragged by a slow ramp-up of new projects that use either spodumene or salt-lake brines as feedstock.

Producers in Qinghai and new projects across the country are expected to bolster output of lithium carbonate in the second half of the year, but the growth will be capped by weaker demand after the NEV subsidy cuts took effect in late June.

Output of lithium carbonate shrank in June, after three consecutive months of gains, which pointed to slacker demand.

China’s output of lithium carbonate is expected to stand at 81,000 mt in July-December.

In the first half of the year, prices of battery-grade lithium hydroxide trended downwards, weighed by slow demand growth and as large premiums over lithium carbonate drove ternary cathode materials producers to lithium carbonate.

This narrowed the price spread with battery-grade lithium carbonate.   

An SMM survey showed that 38,800 mt of lithium hydroxide was produced across China in the first half of 2019, up 84% from January-June of 2018 and 31% from July-December of last year. Albemarle’s plant in Jiangxi, Sichuan Nengtou Dingsheng and Jiujiang Tongyong Lithium primarily accounted for the increase in output.

Spodumene concentrate is the major raw materials for producing lithium hydroxide, which has a high market concentration ratio.

Output of lithium hydroxide grew slower than expected as downstream demand was not strong enough.

Chengtun and Yahua are expected to drive up output of lithium hydroxide in the second half of the year, and the gains are expected to be moderate in anticipation of weak demand.
About 42,000 mt of lithium hydroxide is expected to be produced in July-December.

The development of high-nickel ternary cathode materials might be a driver to supplies of lithium hydroxide in the middle of the fourth quarter.

Prices of battery-grade lithium carbonate and hydroxide are expected to weaken in the second half of 2019.

SMM assessments showed that prices of battery-grade lithium carbonate stood at 71,000-74,000 yuan/mt in early July and are likely to average 66,000 yuan/mt in July-December, with an average for the whole year at 70,000 yuan/mt.

Prices of battery-grade lithium hydroxide stood at 81,000-83,000 yuan/mt as of July 8.

The premium of battery-grade lithium hydroxide over lithium carbonate is expected to fall to 5,000 yuan/mt.

Slower-than-expected supply growth steadies prices of lithium carbonate in H1

SMM Insight 02:01:44PM Jul 08, 2019 Source:SMM

SHANGHAI, Jul 8 (SMM) – Prices of battery-grade lithium carbonate across Chinese markets held stable in the first half of this year, as capacity constraints slowed the supply growth and as frontloading ahead of new energy vehicle subsidy cuts and brisk demand for lithium iron phosphate (LFP) supported demand.

Chinese manufacturers produced 67,500 mt of lithium carbonate in January-June, up 29% year on year and 5% from July-December of 2018, driven by Ganfeng Lithium, Sichuan Nengtou Dingsheng, Nanshi Lithium and China Minmetals Salt Lake, showed an SMM survey.

The growth was slower than expected, dragged by a slow ramp-up of new projects that use either spodumene or salt-lake brines as feedstock.

Producers in Qinghai and new projects across the country are expected to bolster output of lithium carbonate in the second half of the year, but the growth will be capped by weaker demand after the NEV subsidy cuts took effect in late June.

Output of lithium carbonate shrank in June, after three consecutive months of gains, which pointed to slacker demand.

China’s output of lithium carbonate is expected to stand at 81,000 mt in July-December.

In the first half of the year, prices of battery-grade lithium hydroxide trended downwards, weighed by slow demand growth and as large premiums over lithium carbonate drove ternary cathode materials producers to lithium carbonate.

This narrowed the price spread with battery-grade lithium carbonate.   

An SMM survey showed that 38,800 mt of lithium hydroxide was produced across China in the first half of 2019, up 84% from January-June of 2018 and 31% from July-December of last year. Albemarle’s plant in Jiangxi, Sichuan Nengtou Dingsheng and Jiujiang Tongyong Lithium primarily accounted for the increase in output.

Spodumene concentrate is the major raw materials for producing lithium hydroxide, which has a high market concentration ratio.

Output of lithium hydroxide grew slower than expected as downstream demand was not strong enough.

Chengtun and Yahua are expected to drive up output of lithium hydroxide in the second half of the year, and the gains are expected to be moderate in anticipation of weak demand.
About 42,000 mt of lithium hydroxide is expected to be produced in July-December.

The development of high-nickel ternary cathode materials might be a driver to supplies of lithium hydroxide in the middle of the fourth quarter.

Prices of battery-grade lithium carbonate and hydroxide are expected to weaken in the second half of 2019.

SMM assessments showed that prices of battery-grade lithium carbonate stood at 71,000-74,000 yuan/mt in early July and are likely to average 66,000 yuan/mt in July-December, with an average for the whole year at 70,000 yuan/mt.

Prices of battery-grade lithium hydroxide stood at 81,000-83,000 yuan/mt as of July 8.

The premium of battery-grade lithium hydroxide over lithium carbonate is expected to fall to 5,000 yuan/mt.