[SMM Analysis] Battery-grade lithium hydroxide price surged by 1,100 yuan/mt today

The SMM battery-grade lithium hydroxide index price stood at 59,739 yuan/mt, up 1,047 yuan/mtu MoM from yesterday. The price of battery-grade lithium hydroxide coarse particles ranged from 58,300 to 61,300 yuan/mt, with an average price of 59,800 yuan/mt, up 1,100 yuan/mt MoM from yesterday. The price of battery-grade lithium hydroxide micro powder ranged from 62,600 to 67,800 yuan/mt, with an average price of 64,970 yuan/mt, up 1,100 yuan/mt MoM from yesterday. The price of industrial-grade lithium hydroxide ranged from 52,600 to 56,500 yuan/mt, with an average price of 54,600 yuan/mt, up 1,200 yuan/mt MoM from yesterday.

Currently, due to the significant fluctuations in the lithium carbonate futures market, the sentiment for negotiating orders among upstream and downstream lithium hydroxide stakeholders has changed considerably compared to the previous period. This is manifested in the following aspects:

     1. Price: Upstream, due to the recent rise in raw material prices, some lithium chemical plants are experiencing losses, leading to a strong reluctance to sell spot orders. They have not only increased discounts for short-term orders but also jumped their fixed-price quotes. Downstream, ternary cathode material plants currently have some just-in-time procurement needs. Given the concentrated supply, they have been forced to accept higher prices, resulting in a rapid increase in the spot price center.

     2. Production: Due to the continuous rise in current lithium carbonate spot and futures prices, the enthusiasm of lithium hydroxide producers with flexible production lines/carbonisation production lines to produce lithium carbonate has increased, which has had a certain impact on lithium hydroxide output. With a slight increase in downstream demand, there is currently a small-scale destocking situation. Upstream producers have gained greater bargaining power in terms of the supply volume and price of new goods in the near term.

     3. Regarding the lithium hydroxide-lithium carbonate price spread, the current cost of carbonising lithium hydroxide is on the edge of profitability. At certain price points of lithium carbonate futures, traders may have some willingness to carbonise, leading to active inquiries and quotes in the current lithium hydroxide market.

 In the short term, the price of lithium hydroxide this month is significantly influenced by the price of lithium carbonate futures, and it is expected to oscillate within the current price range in the near future.