Lithium Carbonate Prices on the Downward Track This Week

SHANGHAI, Mar 21 (SMM) - Cobalt: Refined cobalt prices continued their downward trend this week, with upstream manufacturers and traders running out of stocks and the supply continuing to shrink. Downstream magnetic material factories are great in numbers and small in scale, and many have suspended their production due to poor risk resistance, difficulties in recovering accounts receivable and restricted logistics during the pandemic. The demand has been extremely poor. MB price hike has slowed in recent days, suppressing the confidence of traders to further raise the prices. As such, traders became bearish on Wuxi market and wanted to sell off as soon as possible. The combination of fundamentals as well as supply and demand greatly pulled back refined cobalt prices. The cobalt sulphate prices remained stable this week.

The arrival of intermediate goods in March has improved, easing the supply issues of raw materials to upstream manufacturers. In addition, cobalt salt plants have seen rising finished product inventory due to poor transactions. The great volatility of nickel prices resurfaced last week, and downstream had weakening demand for cobalt salt.

Cobalt salt market transactions demonstrated totally different situations. Cobalt salt factories with intermediate products as raw materials are affected by the higher costs of MB and stick to their existing offers, with less room for negotiation. Salt factories, whose cobalt salt costs are relatively low as prices of recycled materials fall, may profit from other items and choose to sell cobalt salt at low prices.

Lithium: Lithium carbonate prices fell slightly this week. The overall operating rates on the supply was were normal. On the demand side, with the downstream orders having been settled, the overall orders from cathode active material (CAM) sector in April may be flat or drop slightly. In addition, as more and more CAM manufacturers are receiving toll manufacturing orders, their demand for lithium carbonate contracts.

In terms of market performance, transactions remained poor this week. The offers from mainstream large manufacturers were firm, and small ones had to lower their offers. Nonetheless, the traders’ quotations continued to drop to lower levels, and some material factories also sold off their lithium salt stocks. The overall market price range further expanded.

Lithium hydroxide prices remained stable this week. In light of low supply and the recent nickel price fluctuations, future orders for high nickel products are expected to be pessimistic. The overall lithium hydroxide restocking pace has slowed down. Transactions were sluggish this week and prices are stabilising.

CAM and PCAM: Precursor prices were unchanged this week. Cobalt and nickel salt prices fell slightly, pulling down the cost of precursors. Domestic nickel sulphate was still in losses if calculating the cost with overseas nickel prices, and precursor companies still could hardly make any proper quotations. High raw material prices were more difficult to be transmitted to the downstream. Market transactions were thin.

In terms of ternary materials, the cost was flat. But due to the raw material issue and fluctuating nickel prices, the overall ternary materials production in April is expected to drop slightly. On the demand side, the overall demand from power battery sector was flat. However, considering the falling stocks across the downstream, the actual purchase demand weakened. Demand from electronics and e-bike power battery sectors were still weak. Market transactions were lacklustre this week. And the prices are expected to fall slightly after the cost stabilises.

Lithium iron phosphate prices rose slightly this week. Recently, iron phosphate prices rose along with phosphoric acid and ammonium prices, and some enterprises to start their centralised lithium salt procurement, hence the cost moved up. Overall, the current operating rates of LFP plants have declined, and the terminal demand was low, resulting in poor transactions. But the lithium salt prices will underpin LFP prices, which are expected to stabilise later.

Nickel: According to the comprehensive understanding of upstream and downstream participants, the price range of nickel sulphate factories was 46,000-49,000 yuan/mt. However, the acceptable prices of the downstream was still below 45,000 yuan/mt. Hence until nickel prices fully stabilise, market transactions will remain low.

[Disclaimer: The above representation and data is based on market information SMM believes to be reliable at the time of acquiring as well as the comprehensive assessment by SMM research team, and any and all information provided in this article is for reference only. This article does not constitute a direct recommendation for investment or any decisions in any form and clients shall act on their own discreet and any decisions made by clients are not within the responsibility of SMM.]