China spodumene concentrate imports in January declined in volume with lower prices

SHANGHAI, Mar 3 (SMM) – China imported some 82,000 mt in physical content of spodumene concentrate in January, with the average import price down 31.1% on the year to $519.8/mt, the latest customs data showed.

The amount of imports used to produce lithium salts stood at 78,000 mt, down 41.8% from a year earlier, with the average import price at $492.2/mt, 36.6% lower on the year. No seaborne spodumene raw ore entered China in January. 

Last month, China's major lithium compounds producer Ganfeng Lithium remained the top importer of spodumene concentrate, as it took about 6,100 mt of lithium carbonate equivalent (LCE) from overseas, which was used to produce lithium salts. Grades of the spodumene imports ranged from 3.8% to 6.1%, with the average import price at $408/mt on a cif basis in January. 

Tianqi Lithium was the second-largest Chinese importer of spodumene concentrate last month, who took 1,900 mt of LCE in January (excluding the imports used to make glass-ceramic by Tianqi Xinlong). Import prices of the company averaged $669/mt on a fob basis. 

Grade and average prices of spodumene concentrate imports in January 

Excluding the imports by some major enterprises such as Tianqi, Ganfeng and Yabao Lithium whose purchasing prices were set in long-term agreements, the average import price of spodumene concentrate used to make lithium salts stood at $483/mt in January, according to SMM calculations. SMM learned that prices of spodumene concentrate in Western Australia remained in a downward trend, but the decline has slowed. 

Production, sales and pricing of lithium ore may continue to face headwinds in 2020, on the back of intensified global competition on the supply front and existing inventory pressure at mines, SMM believes. 

According to customs data in January, some Chinese companies have tested sample ore from African countries in a bid to further cut costs. 

Since mid 2019, falling lithium prices have slowed the operations of some newly-commissioned lithium salt producers in Liaoning and Shandong that use spodumene as feedstock, and some smelters that already stockpiled lithium ore delayed their production schedule in a falling market. Current lithium ore prices in negotiations have approached the production costs at several mines in Western Australia. 

Inventory pressure lingered at lithium mines even as they reduced output to control inventories since the fourth quarter. SMM calculations indicated that the global spodumene inventory stood above 150,000 mt of LCE in 2017-2019.