Lithium Carbonate Supply-Demand Balance Expected to Return to Deficit

SHANGHAI, Jun 22 (SMM) – According to SMM Prices, battery-grade lithium carbonate prices rose after staying sleepy for six trading days, and moved between 463,000-475,000 yuan/mt, an average of 469,000 yuan/mt and an intraday again of 1,000 yuan/mt.

The prices of industrial-grade lithium carbonate also rose to the range of 448,000-454,000 yuan/mt, an average of 451,000 yuan/mt and a daily increment of 1,000 yuan/mt.

On the contrary, prices of battery-grade lithium hydroxide were stable between 460,000-475,000 yuan/mt with an average of 467,500 yuan/mt.

In terms of spodumene concentrate, the spot prices (6%, CIF China) also ushered in a wave of hikes today to $4,790-5,030 per tonne with a single-day gain of $30/mt.

Since June, there has been a lot of news relating to lithium ore, with more than seven domestic companies having previously disclosed their respective footprints in the lithium ore sector. Among them, Sinomine Resource Group' Bikita lithium mine in Zimbabwe also held a grand opening ceremony on the afternoon of June 17. The main products of the Bikita lithium project are said to be in the production stage, mainly technical grade petalite concentrate and pollucite concentrate with high grades and low impurities.

The current lithium ore and the lithium industry chain is still heated, which is enough to attract a great number of industry players from other fields. But from the current feedback from market players from different sub-sectors, opinions on future lithium prices seem to have diverged. CATL chief scientist Wu Kai said that lithium ore supply, from a global perspective, is sufficient, and the current price hike is largely the result of speculation. He believes that the soaring lithium carbonate prices is harmful to the health of the industry. In order to change the situation, it is necessary to enhance the self-supply capacity of lithium ore in China considering its heavy dependence on imports. Meanwhile, the recycle market shall also be given equal important.

SMM estimates that the battery-grade lithium carbonate production will be about 16,800 mt in June, a small increase compared with May. And on the demand side, taking into account the rising production schedules of LFP and NMC batteries, the overall demand for battery-grade lithium carbonate will increase significantly. It is expected that the overall battery-grade lithium carbonate demand will increase by 17% in June.

To sum up, lithium carbonate supply-demand balance will return to deficit.